Perry Real Estate College - National Practice Tests 1-5

1.1 Which of the following would be defined as real estate as opposed to real property? a. Wells, driveways, and signs on a parcel of land. b. Mobile homes temporarily parked on a parcel of land. c. Timber that has been cut and is lying on a parcel of land. d. Business equipment an owner or tenant has placed on a parcel of land.

1.1 (a) Wells, driveways, and signs on a parcel of land. The legal concept of real estate encompasses land and all man-made structures that are "permanently" attached to the land. The phrase "permanently attached" refers primarily to one's intention in attaching the item. Obviously, very few if any man-made structures can be permanently attached to the land in the literal sense. But if a person constructs a house with the intention of creating a permanent dwelling, the house is considered real estate. By contrast, if a camper affixes a tent to the land with the intention of moving it to another camp in a week, the tent would not be considered real estate.

1.10 A retired couple has just bought a retirement home with a pier on a large lake. In this case the retirees' water rights extend to a. the high water mark of the body of water at the shoreline. b. the low water mark of the body of water at the shoreline. c. the center of the lake. d. the end of the pier.

1.10 (a) the high water mark of the body of water at the shoreline. Ownership extends to the high-water mark of the body of water. The low water mark would imply that the owner owned the water itself at times of high water levels!

1.11 A waterfront homeowner has just died. What will become of the water rights the owner enjoyed while living in the home? a. They revert to the state when the property is sold. b. They are extinguished. c. They are a personal right belonging to an individual owner, not attaching to the real property. d. They transfer with the property when the property is sold.

1.11 (d) They transfer with the property when the property is sold. Littoral rights attach to the property. When the property is sold, the littoral rights transfer with the property to the new owner.

1.12 Riparian rights concern which of the following bodies of water? a. Lakes. b. Seas and oceans. c. Streams and rivers. d. Navigable lakes.

1.12 (c) Streams and rivers. Riparian rights concern properties abutting moving water such as streams and rivers. If a property abuts a stream or river, the owner's riparian rights are determined by whether the water is navigable or not navigable. If the property abuts a non-navigable stream, the owner enjoys unrestricted use of the water and owns the land beneath the stream to the stream's midpoint. If the waterway in question is navigable, the waterway is considered to be a public easement. In such a case, the owner's property extends t the water's edge as opposed to the midpoint of the waterway.

1.13 Which of the following best describes a "fixture?" a. Any item of personal property positioned within the boundaries of a parcel of real estate. b. An item of personal property that has been converted to real property. c. An item of real property temporarily placed on land for the purpose of conducting a business. d. An item of personal property that has been left in one location for a period of six months.

1.13 (b) An item of personal property that has been converted to real property. A personal property item that has been converted to real property by attachment to real estate is called a fixture. Typical examples are chandeliers, toilets, water pumps, septic tanks, and window shutters. The owner of real property inherently owns all fixtures belonging to the real property. When the owner sells the real property, the buyer acquires rights to all fixtures.

1.14 An item may be considered personal property as opposed to real property provided that a. the owner intended to remove it after a period of time. b. it can be removed without altering the appearance of the structure. c. it is unnecessary to the physical integrity of the structure. d. the owner installed it at some time after acquiring the real property.

1.14 (a) the owner originally intended to remove it after a period of time. One's original intention can override the test of movability in determining whether an item is a fixture or not. If someone attached an item to real property, yet intended to remove it after a period of time, the article may be deemed personal property. If a person intended an article to be a fixture, even though the item is easily removable, the article may be deemed a fixture. For example, an apartment renter installs an alarm system, fully intending to remove the system upon lease expiration. Here, the alarm system would be considered personal property.

1.15 Two people own a house, each having an undivided equal interest. Which of the following best describes what each party owns? a. Fifty percent of the physical house and the land it rests on. b One hundred percent of the home and the land. c. Fifty percent of the estate consisting of the indivisible whole of the real property. d. Each owns one hundred percent of the estate represented by the real property and fifty percent of the physical house and the land it rests on.

1.15 (c) Fifty percent of the estate consisting of the indivisible whole of the real property. An undivided interest is an owner's fractional interest in an entire (undivided) estate, but not in a physical portion of the real property itself. An owner who has an undivided equal interest with another cannot exercise exclusive rights over a portion of the real estate, which is an indivisible whole.

1.16 A real property interest that includes the right to possess is considered a. an estate in land. b. a leasehold estate. c. a fee simple estate. d. the bundle of rights.

1.16 (a) an estate in land. Interests are principally distinguished by whether they include possession. If the interest-holder enjoys the right of possession, the party is considered to have an estate in land, or, familiarly an estate. Freehold and leasehold estates in land are further distinguished by whether the duration of the owner's rights can be determined.

1.17 The right to control land usage by zoning and eminent domain is an example of a. a public interest. b. a police interest. c. an encumbrance. d. an estate in law.

1.17 (a) a public interest. Public entities may own or lease real estate, in which case they enjoy an estate in land. However, government entities also have non-possessory interests in real estate which act to control land use for the public good within the entity's jurisdiction. The prime example of public interest is police power, or the right of the local or county government to zone. Another example of public interest is the right to acquire ownership through the power of eminent domain.

1.18 If the duration of an owner's rights in an estate is not determinable, the owner has a. a tenancy at sufferance. b. a leased fee simple estate. c. a freehold estate. d. a leasehold estate.

1.18 (c) a freehold estate. In a freehold estate, the duration of the owner's rights cannot be determined: the rights may endure for a lifetime, for less than a lifetime, or for generations beyond the owner's lifetime. By contrast, leasehold estates have expirations.

1.19 The distinguishing feature of a leasehold estate is a. ownership of an interest by a tenant. b. temporary ownership of the full bundle of rights in a property. c. unlimited ownership of one right in the bundle of rights in a property. d. that the estate is limited by a lease term.

1.19 (d) that the estate is limited by a lease term. A leasehold estate is distinguished by its specific duration, as represented by the lease term. Further, leasehold tenants only enjoy limited property rights: use; temporary possession, and limited exclusion.

1.2 Which of the following would be considered a property improvement? a. An alteration to land to make it more useful. b. An increase in the value of a property. c. A chicken coop permanently attached to land. d. A parcel of land that has passed a percolation test.

1.2 (c) A chicken coop permanently attached to land. Improvements to real estate include such things as fences, streets, buildings, wells, sewers, sidewalks and piers. Modifications to land or a developer's preparations of a parcel of land can include such activities as grading or clearing, neither of which are considered to be "improvements" in this sense of the word.

1.20 A landowner conveys a parcel of property with the provision that the land cannot be developed for retail purposes. The new owner immediately begins to develop a retail shopping outlet, the grantor finds out and takes the property back. What kind of estate did this landowner convey? a. Fee simple absolute. b. Life estate with reversion. c. Life estate with condition subsequent. d. Fee simple defeasible.

1.20 (d) Fee simple defeasible. The defeasible fee estate is perpetual, provided the usage conforms to stated conditions. Essential characteristics are that the property must be used for a certain purpose or under certain conditions, and, if the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.

1.21 Ned grants his sister Alice an estate for as long as she lives. Her descendants, however, cannot inherit the estate. What kind of estate is it? a. An estate pur autre vie. b. An estate for years. c. An ordinary life estate. d. A legal life estate.

1.21 (c) An ordinary life estate. A life estate is limited in duration to the life of the owner or other named person. Upon the death of the owner (ordinary life estate) or other named individual (pur autre vie life estate), the estate passes to the original owner (a reversionary interest) or another named party (a remainder interest). Thus with the life estate, the owner enjoys full ownership rights during the estate period, and holders of the future interest own either a reversionary or a remainder interest.

1.22 Homestead estates are examples of a. a conventional life estate. b. a legal life estate. c. an estate created by an owner's agreement. d. a fee simple absolute.

1.22 (b) a legal life estate. Homestead, dower, and curtesy are legal life estates. A legal life estate is created by state law as opposed to being created by a property owner's agreement. The focus of a legal life estate is defining and protecting the property rights of surviving family members upon the death of the husband or wife.

1.23 Louis owned a boat and a house before marrying Barbara. While she was single, Barbara owned a new car. The two got married and bought a second home. As a wedding present, Barbara's father bought Louis a motorcycle. Under the law of community property, what property can Louis sell without his wife's consent or signature? a. The boat and house. b. The boat, house, and motorcycle. c. The second home and the motorcycle. d. The boat and motorcycle.

1.23 (b) The boat, house, and motorcycle. Separate property consists of: property owned by either spouse at the time of the marriage; property acquired by either spouse through inheritance or gift during the marriage; property acquired with separate- property funds; and income from separate property. Community property consists of all other property earned or acquired by either party during the marriage. A spouse owns separate property free and clear of claims by the other spouse. He or she can transfer it without the other spouse's signature. Upon the death of the separate property owner, the property passes to heirs by will or laws of descent. Community property cannot be transferred or encumbered without the signatures of both spouses. Upon the death of either spouse, half of the deceased's community property passes to the surviving spouse, and the other half passes to the decedent's heirs.

1.24 Katelyn rents an apartment for one year. What rights has she acquired under the leasehold? a. The right to exclude everyone from the premises. b. The right to encumber the fee interest. c. The right to sell the premises. d. The right to possess and use the premises.

1.24 (d) The right to possess and use the premises. Leasehold tenants are entitled to possess and use the leased premises during the lease term in the manner prescribed in the lease. They also have restricted rights to exclusion.

1.25 An estate from period-to-period will continue as long as a. the tenant makes, and landlord accepts, regular rent payments. b. the term specified in the lease. c. the period is less than a year. d. the landlord has not sold the property.

1.25 (a) the tenant makes, and landlord accepts, regular rent payments. In an estate from period-to-period, also called a periodic tenancy, the tenancy period automatically renews as long as the tenant pays rent in a timely manner and the landlord accepts it. At the end of a tenancy period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period. A conveyance of leased property does not cancel a leasehold interest.

1.26 An estate at will a. cannot be terminated. b. is terminated only if so stated in the lessee's last will and testament. c. terminates on the death of lessor or lessee. d. terminates on the date specified in the lease agreement.

1.26 (c) terminates on the death of lessor or lessee. The estate at will, also called a tenancy at will, has no definite expiration date and hence no "renewal" cycle. The landlord and tenant agree that the tenancy will have no specified termination date, provided rent is paid on time and other lease conditions are met. For example, a son leases a house to his father and mother "forever," or until they want to move. The estate at will is terminated by proper notice, or by the death of either party.

1.27 A tenant continues to occupy an apartment after lease expiration without the consent of the landlord. This type of estate is called a. an estate at sufferance. b. a holdover estate. c. a canceled leasehold. d. a hostile leasehold.

1.27 (a) an estate at sufferance. In an estate at sufferance, a tenant occupies the premises without consent of the landlord or other legal agreement with the landlord. Usually such an estate involves a tenant who fails to vacate at the expiration of the lease, continuing occupancy without any right to do so. For example, a tenant violates the provisions of a lease and is evicted. The tenant protests and refuses to leave despite the eviction order.

1.28 A tenant without a lease has been sending the landlord monthly rent checks, and the landlord continues to accept the payments. What kind of leasehold estate exists? a. Estate for years. b. Estate from period to period. c. Estate at will. d. Estate at sufferance.

1.28 (b) Estate from period to period. In an estate from period-to-period, also called a periodic tenancy, the tenancy period automatically renews for an indefinite period of time, subject to timely payment of rent. At the end of a tenancy period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period.

1.29 A fee or life estate is held by an individual. This form of estate is referred to as a(an) a. tenancy in severalty. b. tenancy by the entireties. c. absolute fee simple. d. legal fee simple.

1.29 (a) tenancy in severalty. If a single party owns the fee or life estate, the ownership is a tenancy in severalty. Synonyms are sole ownership, ownership in severalty, and estate in severalty.

1.3 Which of the following best describes the physical boundaries of land? a. The surface of the earth and infinite space above the surface. b. The center of the earth and infinite space above the earth. c. The surface of the earth and all water and minerals on or below the surface to the center of the earth. d. The surface of the earth and the air rights above the surface to the point defined by local zoning.

1.3 (b) The center of the earth and infinite space above the earth. The legal concept of land encompasses the surface area of the earth; everything beneath the surface of the earth extending downward to its center; all natural things permanently attached to the earth; and the air above the surface of the earth extending outward to infinity. Land, therefore, includes minerals beneath the earth's surface, water on or below the earth's surface, and the air above the surface.

1.30 Six people have identical rights in a property and enjoy an indivisible interest. However any of the owners may sell or transfer his/her interest without consent of the others. This form of ownership is a a. joint tenancy. b. homestead ownership. c. tenancy in common. d. estate in severalty.

1.30 (c) tenancy in common. The tenancy in common, also known as the estate in common, is the most common form of co-ownership when the owners are not married (though tenants in common can be married). The defining characteristics are: two or more owners; identical rights; interests individually owned; electable ownership shares; no survivorship; and no unity of time. With "identical rights", co-tenants share an indivisible interest in the estate, i.e., all have equal rights to possess and use the property subject to the rights of the other co-tenants.

1.31 The "four unities" required to create a joint tenancy include which of the following conditions? a. Parties must acquire respective interests at the same time. b. Parties must be residents of the same state at the time of acquiring the interest. c. Parties must be family members. d. Parties must have joint financial responsibility.

1.31 (a) Parties must acquire respective interests at the same time. To create a joint tenancy, all owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession. These are referred to as the four unities.

1.32 Unlike tenants in common, joint tenants a. own distinct portions of the physical property. b. cannot will their interest to a party outside the tenancy. c. may own unequal shares of the property. d. cannot encumber their interest to outside parties.

1.32 (b) cannot will their interest to a party outside the tenancy. The survivorship feature of joint tenancy presents an advantage to tenancy in common, in that interests pass without probate proceedings. On the other hand, joint tenants relinquish any ability to will their interest to parties outside of the tenancy.

1.33 Which of the following life estates is created by operation of law rather than by the owner? a. Conventional life estate. b. Ordinary life estate. c. Legal life estate. d. Community property life estate.

1.33 (c) Legal life estate. A legal life estate is created by state law as opposed to being created by a property owner's agreement. The focus of a legal life estate is defining and protecting the property rights of surviving family members upon the death of the husband or wife.

1.34 Which of the following is true of a homestead? a. A homestead interest cannot be conveyed by one spouse. b. A homestead interest cannot be passed to the children of the head of household. c. A homestead interest is a form of conventional life estate. d. A homestead is a primary or secondary residence occupied by a family.

1.34 (a) A homestead interest cannot be conveyed by one spouse. A homestead is one's principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts. Homestead laws generally provide that: the homestead interest cannot be conveyed by one spouse; both spouses must sign the deed conveying homestead property.

1.35 A tenant in common can a. sell or transfer his interest without the consent of the other tenants in common. b. use his or her interest in the estate to encumber the entire estate. c. sell, encumber or transfer his or her interest only to the other tenants in common. d. sell, encumber or transfer his or her interest only with the consent of all the other tenants in common.

1.35 (a) sell or transfer his interest without the consent of the other tenants in common. All tenants in common have distinct and separable ownership of their respective interests. Co-tenants may sell, encumber, or transfer their interests without obstruction or consent from the other owners. A co- tenant may not, however, encumber the entire property.

1.36 Which of the following would be considered community property? a. Property acquired before marriage b. A motorcycle bought after the marriage with separate property funds c. Income derived from community property d. A mother's heirloom wedding ring gifted to the wife after her wedding

1.36 (c) Income derived from community property If an income-producing property has been defined as community property, the revenue accruing from the investment is likewise community property.

1.37 When real property is held in a land trust, who controls the property? a. The trustor b. The trustee c. The beneficiary d. The mortgagee

1.37 (c) The beneficiary A land trust allows the trustor to convey the fee estate to the trustee and to name himself or herself the beneficiary. The land trust applies only to real property, not to personal property. The agreement, or deed in trust, grants the beneficiary the rights to possess and use the property, and to exercise control over the actions of the trustee.

1.38 In a community property state, John marries Patricia. Prior to the marriage John owned an SUV. During the marriage, John bought a Buick, John and Patricia bought a second property with money earned from Patricia's job, and each individual received a motorcycle from Patricia's uncle as a gift. What property is community property in this marriage? a. The SUV, the Buick, and the second property. b. The SUV, the Buick, the second property, and the motorcycles. c. The Buick and the second property. d. The Buick, the second property, and the motorcycles.

1.38 (c) The Buick and the second property Community property laws define property rights of legal spouses before, during, and after their marriage, as well as after the death of either spouse. Community property law distinguishes real and personal property into categories of separate and community property. Separate property belongs to one spouse; community property belongs to both spouses equally. Separate property is that property which is acquired prior to the marriage, by gift or inheritance during the marriage, property acquired by separate-property funds, or income from separate property.

1.39 Which of the following is true of a cooperative? a. A cooperative may hold an owner liable for the unpaid operating expenses of other tenants. b. The owners have a fee simple interest in the airspace of their respective apartments. c. Owners may sublease their apartments even if they sell their stock in the cooperative. d. The proprietary lease is guaranteed to have a fixed rate of rent over the life of the lease term.

1.39 (a) A cooperative may hold an owner liable for the unpaid operating expenses of other tenants. Since the corporation owns an undivided interest in the cooperative property, debts and financial obligations apply to the property as a whole, not to individual units as in a condominium.

1.4 The "bundle of rights" refers to a set of rights a. enjoyed by the owner of a property. b. that is synonymous with the Bill of Rights. c. guaranteed to citizens by the Statute of Rights. d. specified in a deed or land contract.

1.4 (a) enjoyed by the owner of a property. This group of rights includes the right to Possess, Use, Transfer, Encumber, and Exclude others from using the property. (Remember: "PUTEE") Transfer rights include the right to sell, rent, donate, assign, or bequeath. The owner may also encumber the item by mortgaging it as collateral for debt.

1.40 Which of the following is true of a tenancy in common? a. The co-owners must be related. b. The owners enjoy an indivisible interest. c. The tenants must acquire their interests at the same time. d. The tenants must pay equal amounts for their interest in the estate.

1.40 (b) The owners enjoy an indivisible interest. The tenancy in common, also known as the estate in common, is the most common form of co-ownership when the owners are not married (though tenants in common can be married). The defining characteristics are: two or more owners; identical rights; interests individually owned; electable ownership shares; no survivorship; and no unity of time. With "identical rights," co-tenants share an indivisible interest in the estate, i.e., all have equal rights to possess and use the property subject to the rights of the other co-tenants.

1.41 Carissa and Robert acquire a condominium as tenants in common. In this circumstance, Carissa can a. sell her interest to a third party without the consent of Robert. b. use her interest in the estate to mortgage the entire estate. c. sell her interest only to Robert. d. sell encumber or transfer her interest only with the consent of Robert.

1.41 (a) sell her interest to a third party without the consent of Robert All tenants in common have distinct and separable ownership of their respective interests. Co-tenants may sell, encumber, or transfer their interests without obstruction or consent from the other owners. A co- tenant may not, however, encumber the entire property.

1.42 When a tenant in common dies, what happens to the tenant's interest in the estate? a. It is divided equally among the surviving tenants in common. b. The surviving tenants must buy the interest from the deceased tenant's heirs or sell their interests to the heirs. c. It becomes a joint tenancy. d. It passes by probate to the deceased tenant's heirs.

1.42 (d) It passes by probate to the deceased tenant's heirs. A deceased co-tenant's estate passes by probate to the decedent's heirs and devisees rather than to the other tenants in common. Any number of heirs can share in the ownership of the willed tenancy.

1.43 Which of the following is true of a joint tenancy? a. The tenants can determine the size of the share owned by each tenant. b. The size of the tenant's shares is determined by the amount of equity each has invested in the property. c. The tenants have an equal and indivisible ownership interest. d. There can be no more than two co-owners, and each has a fifty percent interest.

1.43 (c) The tenants have an equal and indivisible ownership interest. In a joint tenancy, two or more persons collectively own a property as if they were a single person. Rights and interests are indivisible and equal: each has a shared interest in the whole property which cannot be divided up. Joint tenants may only convey their interests to outside parties as tenant-in-common interests. One can not convey a joint tenant interest.

1.44 In contrast to a tenancy in common, in a joint tenancy a. there is a single title to the property. b. there are as many titles to the property as there are co-owners. c. title is held by a trustee. d. co-owners who are married hold separate titles.

1.44 (a) there is a single title to the property. Whereas tenants in common hold separate title to their individual interests, joint tenants together hold a single title to the property. This is referred to as unity of ownership.

1.45 If a joint tenant sells his or her interest to an outside party, a. the new owner becomes a tenant in common with the other owners, who continue to hold a joint tenancy with each other and a tenancy in common with the new owner. b. the joint tenancy continues with the new owner as the third joint tenant. c. the joint tenancy terminates and all owners become tenants in common. d. the joint tenancy terminates and the owners must create a new joint tenancy to include the new owner.

1.45 (a) the new owner becomes a tenant in common with the other owners, who continue to hold a joint tenancy with each other and a tenancy in common with the new owner. A joint tenant may transfer his or her interest in the property to an outside party, but only as a tenancy in common interest. Whoever acquires the interest co-owns the property as a tenant in common with the other joint tenants. The remaining joint tenants continue to own an undivided interest in the property, less the new co-tenant's share.

1.46 When a joint tenant dies, what happens to the tenant's interest in the estate? a. It passes to the decedent's heirs, who become joint tenants. b. It passes as a tenancy in common to the decedent's heirs. c. The joint tenancy terminates and becomes a tenancy in common with the decedent's heirs and the surviving tenants as co-owners. d. It passes to the surviving joint tenants.

1.46 (d) It passes to the surviving joint tenants. In most states, joint tenants enjoy rights of survivorship: if a joint tenant dies, all interests and rights pass to the surviving joint tenants free from any claims of creditors or heirs. When only one joint tenant survives, the survivor's interest becomes an estate in severalty, and the joint tenancy is terminated.

1.47 Under what conditions can two individuals own a property as tenants by the entireties? a. If they so elect at the time of acquiring title. b. If they are blood relatives. c. If they are married. d. If they incorporate.

1.47 (c) If they are married. Tenancy by the entireties is a form of ownership reserved exclusively for husband and wife. It features survivorship, equal interests, and limited exposure to foreclosure. In some states it now applies to same-sex couples.

1.48 When an estate is held in a trust, which party holds legal title? a. The beneficiary. b. The trustor. c. The trustee. d. The grantor.

1.48 (c) The trustee. In an estate in trust, a fee owner-- the grantor or trustor-- transfers legal title to a fiduciary-- the trustee-- who holds and manages the estate for the benefit of another party, the beneficiary. The trust may be created by a deed, will, or trust agreement.

1.49 Tanya buys a 4-bedroom condominium. As the new owner, she has the right to a. sell or mortgage the unit without impediment from individual owners of neighboring units. b. sell the interest in the physical unit separately from the interest in the common elements. c. prevent non-owners from using the unit owner's portion of the common elements. d. exclusively possess and use those portions of the common areas structurally or functionally necessary for the operation of the unit.

1.49 (a) sell or mortgage the unit without impediment from individual owners of neighboring units. Condominium units can be individually sold, mortgaged, or otherwise encumbered without interference from other unit owners. An owner may not sell interests in the apartment separately from the interest in the common elements. Unit owners exclusively possess their apartment space, but must share common areas with other owners.

1.5 Which of the following best describes the legal concept of personal property? a. Any item which is acquired in a fee simple sale transaction. b. Any item of property that is not definable as real property. c. Any movable property owned by an individual, partnership, or corporation. d. Any item that is not a natural item affixed to the earth.

1.5 (b) Any item of property that is not definable as real property. Personal property is any owned item which is not real estate, and the rights associated with owning the personal property item. Items of personal property are also called chattels or personalty.

1.50 A condominium owner's share of maintenance and operations expenses are based on a. the unit's pro rata share of floor space. b. the unit's pro rata share of the property value as defined in the declaration. c. the number of shares the owner purchased in the condominium association. d. the assessed value of the condominium unit.

1.50 (b) the unit's pro rata share of the property value as defined in the declaration. The unit's pro rata share of the property's ownership as defined in the declaration determines the amount of a unit owner's assessment. For example, if a unit represents a 2% share of the property value, that unit owner's assessment will be 2% of the property's common area expenses.

1.51 By contrast to a condominium, the owner of a cooperative owns a. shares in a corporation or association and a proprietary lease in a physical unit. b. a fee simple interest in a physical unit plus a tenancy in common in common elements. c. a tenancy in common in a physical unit and the common areas. d. a ground lease in the physical unit's pro rata share of land and a proprietary lease in the unit.

1.51 (a) shares in a corporation or association and a proprietary lease in a physical unit. In a cooperative, or co-op, one owns shares in a non-profit corporation or cooperative association, which in turn acquires and owns an apartment building as its principal asset. Along with this stock, the shareholder acquires a proprietary lease to occupy one of the apartment units.

1.52 In a cooperative, real property is owned only by a. the individual unit owners. b. the individual unit owners and the cooperative association. c. the cooperative developer. d. the corporate entity of the cooperative association.

1.52 (d) the corporate entity of the cooperative association. The corporate entity of the cooperative association is the only party in the cooperative with a real property interest. The association's interest is an undivided interest in the entire property. There is no ownership interest in individual units, as with a condominium.

1.53 In a time-share freehold, owners acquire a. undivided interests in the property as tenants in common. b. a renewable periodic tenancy from for a portion of a year. c. a pro rata share of a leased fee. d. a tenancy in severalty for a portion of a year.

1.53 (a) undivided interests in the property as tenants in common. In a freehold time-share, or interval ownership estate, tenants in common own undivided interests in the property. Expense prorations and rules governing interval usage are established by separate agreement when the estate is acquired.

1.54 A party has just purchased a manufactured housing unit. When is this property considered real property? a. As soon as it is purchased b. As soon as it is constructed c. As soon as it is affixed to the ground. d. This form of property is considered personal property at all times.

1.54 (c) As soon as it is affixed to the ground. Mobile home units and manufactured homes are personal property until they are secured to the foundation of the lot in whatever form. Prior to affixing these items are personal property.

1.55 Kiki's annual lease expires on December 31st. On January 7th, Kiki has still not vacated the premises. In this case, what happens to this person's tenancy and what is the resulting leasehold estate called, if anything? a. The tenancy becomes a leasehold by prescription. b. The estate becomes a holdover tenancy, a periodic leasehold estate. c. The estate becomes a delinquent estate for years tenancy subject to immediate eviction. d. There is no subsequent tenancy; the tenant must vacate immediately.

1.55 (b) The estate becomes a holdover tenancy, a periodic leasehold estate. If a tenant with a leasehold estate for years remains in possession of the leased premises after lease expiration, a holdover lease is created. In the absence of a new lease agreement stating otherwise, the holdover tenancy becomes a periodic tenancy.

1.6 The right to encumber a property means that the owner can a. sell the property to an encumbered party. b. pledge the property as collateral for debt. c. lease the property. d. assign the bundle of rights to another.

1.6 (b) pledge the property as collateral for debt.. The right to encumber the property essentially means the right to mortgage the property as collateral for debt. There may be restrictions to this right, such as a spouse's right to limit the degree to which a homestead may be mortgaged.

1.7 A property owner leases 60 acres of agricultural land for a renewable period of 5 years. In the context of real estate rights, this lease represents a(n) a. transfer of a portion of the bundle of rights. b. encroachment on the bundle of rights. c. conveyance of the complete bundle of rights. d. encumbrance of the tenant's rights.

1.7 (a) transfer of a portion of the bundle of rights. An ordinary lease is a common example of the transfer of a portion of one's bundle of rights. The owner relinquishes the right to possess portions of the surface, perhaps a building, in return for rent. The tenant enjoys the rights to possess and use the building over the term of the lease, after which these rights revert to the landlord. During the lease term, the tenant has no rights to the property's subsurface or airspace other than what the building occupies. Further, the tenant does not enjoy any of the other rights in the bundle of rights: he or she cannot encumber the property or transfer it. To a limited degree, the tenant may exclude persons other than the legal owner from the property.

1.8 A homeowner is very upset over a drone that a neighbor flies over his house. He takes his case to court to end this possible violation of rights. Does he have a case, and on what basis? a. No. The neighbor is not physically on his property. b. No. The drone is in the air, so he cannot exercise any surface rights. c. Yes. The owner has the right to stop encroachments. d. Yes. The drones infringe on his air rights.

1.8 (d) Yes. The drones infringe on his air rights. Air rights apply to the space above the surface boundaries of the parcel, as delineated by imaginary vertical lines extended to infinity. Since the advent of aviation, property owners' air rights have been curtailed to allow aircraft to fly over one's property provided the overflights do not interfere with the owner's use and enjoyment of the property. The issue of violation of air rights for the benefit of air transportation is an ongoing battle between aircraft owners, airlines, airports, and nearby property owners.

1.9 Littoral rights apply to which of the following? a. Boat able ponds entirely contained within the boundaries of an owner's property. b. Streams and rivers. c. Navigable lakes, seas, and oceans. d. Navigable streams and rivers.

1.9 (c) Navigable lakes, seas, and oceans. Littoral rights concern properties abutting bodies of water that are not moving, such as lakes and seas. Owners of properties abutting a navigable, non-moving body of water enjoy the littoral right of use, but do not own the water nor the land beneath the water. The legal premise underlying the definition of littoral rights is that a lake or sea is a navigable body of water, therefore, public property owned by the state. By contrast, a body of water entirely contained within the boundaries of an owner's property is not navigable. In such a case, the owner would own the water as well as unrestricted rights of usage.

2.1 Which of the following describes an encumbrance? a. A third party's right to encroach upon a property without the permission of the property owner. b. A third party's right to claim the sale proceeds of a property that has been mortgaged as collateral for a loan. c. A third party's interest in a real property that limits the interests of the freehold property owner. d. Another's right to acquire a freehold interest in a property against the property owner's wishes.

2.1 (c) A third party's interest in a real property that limits the interests of the freehold property owner. An encumbrance is an interest in and right to real property that limits the legal owner's freehold interest. In effect, an encumbrance is another's right to use or take possession of a legal owner's property, or to prevent the legal owner from enjoying the full bundle of rights in the estate.

2.10 How is a lien terminated? a. Payment of the debt that is the subject of the lien and recording of the satisfaction. b. Transfer of the property that has the lien. c. Recording of another lien that is superior. d. Death of the lienor or lienee.

2.10 (a) Payment of the debt that is the subject of the lien and recording of the satisfaction. A lien terminates on payment of the debt and recording of documents. Payment of the debt and recording of the appropriate satisfaction documents ordinarily terminate a lien. If a default occurs, a suit for judgment or foreclosure enforces the lien. These actions force the sale of the property.

2.11 A judge rules in favor of the creditor in a court proceeding and places a judgment lien against all the debtor's assets, including his real property. This is an example of a(n) a. voluntary junior lien. b. involuntary superior lien. c. involuntary specific lien. d. involuntary general lien.

2.11 (d) involuntary general lien. A general lien is one placed against any and all real and personal property owned by a particular debtor. An example is an inheritance tax lien placed against all property owned by the heir. A specific lien attaches to a single item of real or personal property and does not affect other property owned by the debtor. In addition, judgment liens are junior, involuntary liens.

2.12 A real estate tax lien, a federal income tax lien, a judgment lien, and a mortgage lien are recorded against a property. Which lien will be paid first when the property is sold? a. Real estate tax lien. b. Federal income tax lien. c. Judgment lien. d. Mortgage lien.

2.12 (a) Real estate tax lien. The category of superior, or senior, liens ranks above the category of inferior, or junior, liens, meaning that superior liens receive first payment from the proceeds of a foreclosure. The superior category includes liens for real estate tax, special assessments, and inheritance tax. Other liens, including income tax liens, mortgage liens and judgment liens, are inferior.

2.13 A lien holder can change the lien priority of a junior lien by agreeing to a. change the date of recording. b. lower the amount of the claim. c. cancel the lien. d. subordinate the lien.

2.13 (d) subordinate the lien. A lienor can change the priority of a junior lien by voluntarily agreeing to subordinate, or lower, the lien's position in the hierarchy. This change is often necessary when working with a mortgage lender who will not originate a mortgage loan unless it is senior to all other junior liens on the property. The lender may require the borrower to obtain agreements from other lien holders to subordinate their liens to the new mortgage.

2.14 Which of the following accurately describes the act of foreclosure? a. A court-ordered acceleration of loan payments. b. The final step in a bankruptcy filing. c. A proceeding to enforce a lien by forcing the sale or transfer of a secured property. d. A proceeding to take equitable title to a property that was liened as security for a mortgage loan.

2.14 (c) A proceeding to enforce a lien by forcing the sale or transfer of a secured property. All liens can be enforced by the sale or other transfer of title of the secured property, whether by court action, operation of law, or through powers granted in the original loan agreement. The enforcement proceedings are referred to as foreclosure. Note that lienors already possess equitable title, so they do not need to undertake a legal proceeding to establish this.

2.15 A property is secured by a mortgage that does not contain a "power of sale" clause. To foreclose, the lien holder will have to a. file a deficiency suit. b. file a foreclosure suit. c. file a suit to quiet title. d. obtain a quit claim deed.

2.15 (b) file a foreclosure suit. Judicial foreclosure occurs in states that use a two-party mortgage document (borrower and lender) that does not contain a "power of sale" provision. Lacking this provision, a lender must file a foreclosure suit and undertake a court proceeding to enforce the lien.

2.16 A homeowner defaults on his mortgage loan. In the subsequent foreclosure action, the lender takes title to the liened property directly instead of initiating a court-ordered public sale. This is an example of a. strict foreclosure. b. judicial foreclosure. c. non-judicial foreclosure. d. deed in lieu of foreclosure.

2.16 (a) strict foreclosure. Strict foreclosure is a court proceeding that gives the lender title directly, by court order, instead of giving cash proceeds from a public sale. On default, the lender gives the borrower official notice. After a prescribed period, the lender files suit in court, whereupon the court establishes a period within which the defaulting party must repay the amounts owed. If the defaulter does not repay the funds, the court orders transfer of full, legal title to the lender.

2.17 A property owner gives Deanna permission to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Deanna granted originally, and will it survive the owner's death? a. A personal easement in gross, which continues after the owner's death. b. An easement by prescription, which continues after the owner's death. c. A license, which continues after the owner's death. d. A license, which terminates upon the owner's death.

2.17 (d) A license, which terminates upon the owner's death. A license is a personal right that a property owner grants to another to use the property for a specific purpose (to reach the kindergarten school bus). Unlike a personal easement in gross, which terminates only on the death of the grantee (Betty Luanne, in this instance), a license is revocable at any moment, is not transferable and does not attach to the land. It ceases on the death of either party, or on the sale of the property.

2.18 On two adjacent properties, there is an easement that allows property A to use the driveway that belongs to property B. Here, property A is said to be which of the following in relation to property B? a. Subservient estate. b. Servient tenement. c. Senior tenant. d. Dominant tenement.

2.18 (d) Dominant tenement. An easement appurtenant gives a property owner a right of usage to portions of an adjoining property owned by another party. The property enjoying the usage right is called the dominant tenement, or dominant estate. The property containing the physical easement itself is the servient tenement, since it must serve the easement use.

2.19 A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of a. an injunction. b. a deed restriction. c. an easement. d. a land trust.

2.19 (b) a deed restriction. A private party who wants to control the quality and standards of a property can establish a deed restriction. Deed restrictions take precedence over zoning ordinances if they are more restrictive.

2.2 Which of the following is true of easements in general? a. They involve the property that contains the easement and a non-owning party. b. They apply to a whole property, not to any specific portion of the property. c. They only involve the legal owner of the property. d. They may require a specific use, but cannot prohibit one.

2.2 (a) They involve the property that contains the easement and a non-owning party. An easement is an interest in real property that gives the holder the right to use portions of the legal owner's real property in a defined way. One cannot own an easement over one's own property. Easement rights may apply to a property's surface, subsurface, or airspace, but the affected area must be defined. An easement may be affirmative, allowing a use, such as a right-of-way, or negative, prohibiting a use, such as an airspace easement that prohibits one property owner from obstructing another's ocean view.

2.20 What distinguishes a lien from other types of encumbrance? a. It involves a monetary claim against the value of a property. b. It lowers the value of a property. c. It is created voluntarily by the property owner. d. It attaches to the property rather than to the owner of the property.

2.20 (a) It involves a monetary claim against the value of a property. A lien is a creditor's claim against personal or real property as security for a debt of the property owner. If the owner defaults, the lien gives the creditor the right to force the sale of the property to satisfy the debt. Liens do not necessarily alter the property value. Liens can be involuntary as well as voluntary. Finally, liens attach to the property, but so do other encumbrances.

2.21 Which of the following defines actual notice? a. It is notice published in a newspaper. b. It is knowledge one could have or should have obtained. c. It is notice explicitly stated in a legal document. d. It is knowledge received or imparted through direct experience.

2.21 (d) It is knowledge received or imparted through direct experience. The term "notice" is synonymous with "knowledge." A person who has received actual notice has actual knowledge of something. Receiving actual notice means learning of something through direct experience or communication. Thus, a document in itself cannot be actual notice. It is the seeing of the document that makes it actual notice.

2.22 Which of the following defines constructive notice? a. It is notice published in a newspaper. b. It is knowledge one could have or should have obtained. c. It is notice explicitly stated in a legal document. d. It is knowledge received or imparted through direct experience.

2.22 (b) It is knowledge one could have or should have obtained. Constructive notice, or legal notice, is knowledge of a fact that a person could have or should have obtained. The foremost method of imparting constructive notice is by recordation of ownership documents in public records, specifically, title records. Since public records are open to everyone, the law generally presumes that when evidence of ownership is recorded, the public at large has received constructive notice of ownership.

2.23 Ownership of real estate can be transferred voluntarily or involuntarily. The three ways title can be transferred voluntarily are by a. grant, deed, and will. b. escheat, deed, and covenant. c. title certificate, will, and deed. d. sale contract, deed, and warrant of seizin.

2.23 (a) grant, deed, and will. Voluntary transfer, or voluntary alienation, is an unforced transfer of title by sale or gift from an owner to another party. If the transferor is a government entity and the recipient is a private party, the conveyance is a public grant. If the transferor is a private party, the conveyance is a private grant. A living owner makes a private grant by means of a deed of conveyance, or deed. A private grant that occurs when the owner dies is a transfer by will.

2.24 What is the function of recording a deed? a. It makes the deed valid. b. It causes title to pass. c. It gives constructive notice of ownership. d. It removes all prior recorded encumbrances.

2.24 (c) It gives constructive notice of ownership. Recording is not necessary to make a deed valid. However, it is in the grantee's best interests to do so. Recording the deed gives the public constructive notice of the grantee's ownership.

2.25 The only clause that is actually required in a deed is the a. habendum clause. b. granting clause. c. reserving clause. d. tenendum clause.

2.25 (b) granting clause. The granting, or premises, clause is the only required clause. It contains the conveyance intentions; names the parties; describes the property; and indicates a nominal consideration.

2.26 The type of deed that offers the grantee the fullest protection against claims to the title is the a. general warranty deed. b. special warranty deed. c. quitclaim deed. d. bargain and defend deed.

2.26 (a) general warranty deed. The general warranty deed, or warranty deed for short, contains the fullest possible assurances of good title and protection for the grantee. The deed is technically a bargain and sale deed in which the grantor promises to defend against any and all claims to the title. The overall general warranty covenant is: "I own and will defend."

2.27 What is one of the purposes of a lawsuit to "quiet title"? a. To force the grantor to defend the title against a third party claim. b. To terminate a co-ownership estate when one co-owner is unwilling. c. To keep the owner's name out of the title records. d. To have an encumbrance removed if the lienholder cannot prove its validity.

2.27 (d) To have an encumbrance removed if the lienholder cannot prove its validity. Where there is a possibility that prior errors in deeds or other recorded documents might cloud (encumber) the title, the relevant parties execute a quitclaim deed to convey "any and all" interest to the grantee. If a party responsible for encumbering title refuses to quitclaim the interest, the owner may file a quiet title suit. This requires the lienor to prove the validity of an interest. If the defendant is unable to do so, the court removes the cloud by decree.

2.28 Which of the following best describes the documentary stamp tax? a. A transfer tax based on the price of the property being conveyed. b. A tax a title company must pay in order to examine title records in the recorder's office. c. A tax collected by attorneys and paid to the state when transfer documents are prepared. d. A tax on stamps used to certify the authenticity of a conveyance.

2.28 (a) A transfer tax based on the price of the property being conveyed. State law usually requires payment of a documentary stamp tax on a conveyance of real property. The tax is based on the actual price of the property conveyed, thus enabling taxing authorities to ascertain current market value for ad valorem tax purposes. Payment of the tax is evidenced on the deed.

2.29 The court proceeding that generally settles a decedent's estate is called a. testate. b. probate. c. escheat. d. distribution.

2.29 (b) probate. A court proceeding called probate generally settles a decedent's estate, whether the person has died testate (having left a valid will) or intestate (having failed to do so).

2.3 Mr. King wants to offer 100 acres of his property for sale. Since the property is landlocked, he will have to put in a driveway to the road that will run across his remaining property. What kind of easement will he have to grant? a. An easement in gross. b. A commercial easement. c. A personal easement. d. An easement appurtenant.

2.3 (d) An easement appurtenant. An easement appurtenant gives a property owner a right of usage to portions of an adjoining property owned by another party. The property enjoying the usage right is called the dominant tenement, or dominant estate. The property containing the physical easement itself is the servient tenement, since it must serve the easement use.

2.30 If an owner of real property dies intestate and has no legal heirs, what will happen to the property? a. It will escheat to the state or county. b. It will transfer to the decedent's executor. c. It will be divided equally among adjoining property owners. d. It will become a public easement.

2.30 (a) It will escheat to the state or county. If an intestate decedent has no heirs, the estate escheats, or reverts, to the state or county after all claims and debts have been validated and settled.

2.31 A municipality wants to build a sewage treatment facility which will require the acquisition of several parcels of privately owned land. What legal power enables the municipality to buy the necessary properties, even against the owners' wishes? a. Estoppel. b. Escheat. c. Alienation. d. Eminent domain.

2.31 (d) Eminent domain. Various government and public entities can transfer private property to the public sphere by the power of eminent domain. The transfer is involuntary, even though the owner receives compensation. For example, a city government wants to widen a highway to accommodate growth. The government uses eminent domain to condemn and purchase all properties abutting the thoroughfare in order to complete the construction project.

2.32 An adverse possessor must be able to successfully demonstrate that he or she has been a. openly possessing and claiming the property without the owner's consent. b. occupying the property without an occupancy permit. c. using the property intermittently and without permission over a period of years. d. building a permanent structure on the property.

2.32 (a) openly possessing and claiming the property without the owner's consent. To claim legal title, the adverse possessor must be able to show a claim of right or color of title as reason for the possession; have notorious possession, which is possession without concealment; maintain a consistent claim of hostile possession, which is a claim to ownership and possession regardless of the owner's claims or consent; occupy the property continuously for a statutory period of time; in some states, pay taxes.

2.33 A buyer has signed a contract to purchase a property, but is uncertain of the condition of the title. Which of the following parties is legally responsible for knowing the condition of the title? a. The County Recorder. b. The seller's agent. c. The buyer. d. The mortgage lender.

2.33 (c) The buyer. Title records protect the buyer by revealing whether a property has marketable title, one free of undesirable encumbrances. The buyer is legally responsible for knowing the condition of title, since it is a matter of public record.

2.34 A break in the chain of title to a property results in a. a clouded title. b. a title plant. c. a lien of indeterminate ownership. d. a duplicate title.

2.34 (a) a clouded title. Chain of title refers to the succession of property owners of record dating back to the original grant of title from the state to a private party. If there is a missing link in the chronology of owners, or if there was a defective conveyance, the chain is said to be broken, resulting in a clouded title to the property.

2.35 Wayne and Leota obtain an insurance policy that protects them from liabilities and losses resulting from title defects. The kind of policy they bought is a a. homeowner's insurance policy. b. standard owner's title insurance policy. c. lender's title insurance policy. d. private mortgage insurance policy.

2.35 (b) standard owner's title insurance policy. An owner's policy may have standard coverage or extended coverage. Standard coverage protects against title defects such as incompetent grantors, invalid deeds, fraudulent transaction documents, and defects in the chain of title. Extended coverage protects against liabilities that may not be of public record, including fraud, unrecorded ownership claims, unintentional recording errors, and unrecorded liens.

2.36 An owner transfers title to a property to a buyer in exchange for a motorcycle. This is an example of a. voluntary alienation. b. involuntary liquidation. c. hypothecation. d. 1031 exchange.

2.36 (a) voluntary alienation. Voluntary alienation is an unforced transfer of title by sale or gift from an owner to another party.

2.37 A person wishes to convey any and all interests in a property to another without assurance of the property's marketability. This party would most likely use which of the following types of deed? a. A sheriff's deed. b. A special warranty deed. c. A partition deed. d. A quitclaim deed.

2.37 (d) A quitclaim deed. A quitclaim deed transfers real and potential interests in a property, whether an interest is known to exist or not. The grantor makes no claim to any interest in the property being conveyed and offers no warrants to protect the grantee. Where there is a possibility that prior errors in deeds or other recorded documents might cloud (encumber) the title, the relevant parties execute a quitclaim deed to convey "any and all" interest to the grantee.

2.38 Jennifer owns a one-half interest in a condominium as a tenant in common with her business partner. If Jennifer has several heirs and dies without a will, the property will a. pass to the heirs by the laws of descent and distribution. b. escheat to the state. c. pass to the surviving spouse based on homestead law. d. pass to the surviving heirs according to the provisions of the will.

2.38 (a) pass to the heirs by the laws of descent and distribution. In this circumstance, the estate, including real property, will pass to lawful heirs according to the state's laws of descent and succession or distribution. These laws apportion the estate without regard to the wishes of the heirs or the intentions of the decedent. Escheat, by which the state takes the property, applies only if there are no legal heirs.

2.39 A drifter secretly lives in an abandoned shack on a large ranch property. After twenty years, the person makes a claim of ownership to the shack and the land immediately surrounding it that he had cleared. This claim will likely be a. upheld through adverse possession. b. upheld because of the length of possession. c. declined through the doctrine of prior appropriation. d. declined because possession was secretive.

2.39 (d) declined because possession was secretive. One of the preconditions for a claim of ownership based on adverse possession is notorious possession, or possession without concealment. Even if the length of possession in this case meets the statutory requirement, the drifter's secretiveness would invalidate the claim.

2.4 If property Alpha has a court-ordered easement across property Beta in order for Alpha to have access to a public road, the easement is a(n) a. easement by prescription. b. personal easement. c. easement by necessity. d. easement in gross.

2.4 (c) easement by necessity. An easement by necessity is an easement appurtenant granted by a court of law to a property owner because of a circumstance of necessity, most commonly the need for access to a property. Since property cannot be legally landlocked, or without legal access to a public thoroughfare, a court will grant an owner of a landlocked property an easement by necessity over an adjoining property that has access to a thoroughfare.

2.40 To be marketable, title must be a. insured. b. free of undisclosed defects and encumbrances. c. abstracted by an attorney. d. guaranteed by a title certificate.

2.40 (b) free of undisclosed defects and encumbrances. Marketable title is, by definition, one that is free and clear of undesirable and unknown encumbrances, claims, clouds, or other defects. Attorney's abstracts and title certificates do not guarantee that a title is marketable.

2.41 Which of the following types of leasehold estate lacks a specific term? a. Estate for years. b. Estate from period-to-period. c. Estate at will. d. Estate by the entireties.

2.41 (c) Estate at will. Three of the four principal types of leasehold estate are: the estate for years, which has a specific lease term; the estate from period-to-period, where the lease term of a specific period automatically renews; and the estate at will, which has no specified lease term. The fourth principal type, the estate at sufferance, is a tenancy without consent that therefore also has no specific term.

2.42 A landlord generally has the right to enter the leased premises a. at any time without notice. b. for specified reasonable purposes. c. provided the tenant gives prior permission. d. only thirty days prior to lease expiration.

2.42 (b) for specified reasonable purposes. A tenant has the sole right to occupy and use the premises without interference from outside parties, including the landlord. The landlord may enter the premises for specified purposes such as inspections, but the interference must be reasonable and limited. In addition, the landlord can do nothing outside of the lease's express provisions that would impair the tenant's enjoyment of income deriving from use of the premises.

2.43 When a tenant rents an apartment, he or she is usually responsible for a. compliance with the rules and regulations of the building. b. payment for any alterations to the leased space. c. recording the lease in title records. d. occupying the premises throughout the lease term.

2.43 (a) compliance with the rules and regulations of the building. The lease defines the tenant's obligations, which principally are to pay the rent on time; maintain the property's condition; and comply with the rules and regulations of the building.

2.5 An encroachment is a. an easement that has not been recorded on the title of the burdened property. b. an unauthorized physical intrusion of one property into another. c. a right granted by a property owner to the owner of an adjoining property to build a structure that protrudes across the property boundary. d. a structure that does not comply with a zoning ordinance.

2.5 (b) an unauthorized physical intrusion of one property into another. An encroachment is the unauthorized, physical intrusion of one owner's real property into that of another. Examples of encroachments are: a tree limb extending into the neighbor's property, violating his or her airspace; a driveway extending beyond the lot line onto the neighbor's land; and a fence built beyond the property line.

2.6 A court might grant an easement by prescription if a. a town needs to dig a trench across an owner's property to install a sewer line to a neighboring property, and the owner refuses permission. b. a property owner sells the front half of a lot and wants to continue using the driveway to access the rear of the lot. c. a trespasser has been using an owner's property for a certain period with the owner's knowledge but without permission. d. a property owner wants to prevent the owner of an adjoining property from building a an improvement that blocks her view.

2.6 (c) a trespasser has been using an owner's property for a certain period with the owner's knowledge but without permission. If someone uses another's property as an easement without permission for a statutory period of time and under certain conditions, a court order may give the user the easement right by prescription, regardless of the owner's desires. For a prescriptive easement order to be granted, the following circumstances must be true: the use has been occurring without permission or license; the owner knows or is presumed to have known of the use; and the use has been generally uninterrupted over the statutory prescriptive period.

2.7 The purpose of a deed restriction is to enable an owner to specify a. the form of ownership in which a property may be held. b. how long a property must be owned before it can be legally transferred. c. what groups of people are legally excluded from future ownership of a property. d. how a property may be used and what improvements may be built on it.

2.7 (d) how a property may be used and what improvements may be built on it. A deed restriction is a limitation imposed on a buyer's use of a property by stipulation in the deed of conveyance or recorded subdivision plat. A deed restriction may apply to a single property or to an entire subdivision. A developer may place restrictions on all properties within a recorded subdivision plat. Subsequent re-sales of properties within the subdivision are thereby subject to the plat's covenants and conditions.

2.8 Melinda purchases a house and finances it. The lender in turn places a lien on Melinda's title. The lien in this mortgage transaction is a. evidence of debt incurred by a property owner. b. a promissory note granted by a property owner as security for a debt. c. the creditor's claim against the property as collateral security for the loan. d. the document required to clear clouded title.

2.8 (c) the creditor's claim against the property as collateral security for the loan. A lien is a creditor's claim against personal or real property as security for a debt of the property owner. If the owner defaults, the lien gives the creditor the right to force the sale of the property to satisfy the debt. For example, a homeowner borrows $5,000 to pay for a new roof. The lender funds the loan in exchange for the borrower's promissory note to repay the loan. At the same time, the lender places a lien on the property for $5,000 as security for the debt. If the borrower defaults, the lien allows the lender to force the sale of the house to satisfy the debt.

2.9 In a lien-theory state, what kind of interest does a mortgage lender have in the liened property? a. A possessory interest. b. A tenancy-by-mortgagee interest. c. A legal interest in a pro rata share of the property. d. An equitable interest.

2.9 (d) An equitable interest. A lienor generally has an equitable interest in the property, but not legal ownership. The exception is a mortgage lien on a property in a title-theory state. In these states, the mortgage transaction conveys legal title to the lender, who holds it until the mortgage obligations are satisfied. During the mortgage loan period, the borrower has equitable title to the property.

NATIONAL TEST 1: Rights; Interests and Estates; Ownership

NATIONAL TEST 1: Rights; Interests and Estates; Ownership

NATIONAL TEST 2: Encumbrances; Liens; Title Transfer and Recording; Leases

NATIONAL TEST 2: Encumbrances; Liens; Title Transfer and Recording; Leases