Real Estate Exam 3 (law and practice)

Smith and Jones are joint tenants. Smith sells her interest to Brown. What is the relationship between Jones and Brown? A. they are tenants in common B. they are joint tenants C. they each have ownership in severalty D. they are tenants in entirely

A - Once the joint tenancy has been broken by the sale of the property then it is tenancy in common.

Which one of the following is not a police power? A. building codes B. zoning C. liens D. subdivision regulations

C - Liens are not laws or regulations of a government or quasi-government agency; liens are related to debts. Some liens can be related to government regulations, such as a tax lien.

Probate means an action to: A. cure a defect by a quitclaim deed B. prove title by adverse possession C. process a will to establish its validity D. obtain access to a safe deposit box

C - Probate is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's property under the valid will. A surrogate court decides the validity of a testator's will. A probate interprets the instructions of the deceased, decides the executor as the personal representative of the estate, and adjudicates the interests of heirs and other parties who may have claims against the estate.

The absolute ownership of a unit in a multi-unit building, based on a legal description of the airspace the unit actually occupies, is a: A. condominium B. cooperative C. time share D. community property

A - A condominium means the person actually OWNS the unit. A cooperative is that you are a share holder in the building but do not own the unit outright,

Mr. Brown and Mrs. Brown held title as tenants in common to the family home. Mrs. Brown wanted a niece to inherit her share of the property when she died, but did not want to tell her husband. So she made out a proper deed conveying her interest to her niece, with her signature duly acknowledged, and gave it to a close friend who agreed to hand it over to the niece after Mrs. Brown's death. Mrs. Brown died, and the friend carried out the instructions. The deed was: A. invalid, the deed needed to be directly delivered or recorded while Mrs. Brown was alive B. Invalid, as she could not deed her interest in community property C. Valid because the friend could testify to Mrs. Brown's intent D. valid as deed was delivered to ta close relative after grantor's demise

A - A deed cannot be delivered after the death of the grantor (Mr's Brown). Since there was not proper delivery, Mrs. Brown's Last Will and Testament shall decide who gets her share of the property. The niece could go to court to have the will overturned claiming she had "color of title". This means that although the deed was defective it was written evidence of Mrs Brown's intention that she receive the property. Given the circumstances, Mr Brown might disagree and a judge would need to decide. (more to know)

The person who acquires real property under the terms of a will is known as a(n): A. devisee B. administrator C. testator D. executor

A - A devise is a transfer of real property under the terms of a will. The person receiving the real property is known as the devisee. The person who is transferring the property is known as the devisor.

The most comprehensive type of ownership of land is: A. a fee simple estate B. a life estate C. a conditional fee estate D. a future estate

A - A fee simple (or fee simple absolute) is an estate in land, a form of freehold ownership. It is the most common way that real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property.

An estate of inheritance or a life estate, is known as: A. freehold B. less than a freehold C. greater than freehold D. leasehold

A - A freehold estate is an estate in real property in which the exact termination date is unknown. Fee Simple and LIfe Estates both fall into this category. Leases do not.

The remnant of an estate that the grantor holds after he's granted a life estate to another person, if the estate will return to the grantor, is called: A. reversionary interest B. reversionary right C. reversion D. remainder estate

A - A reversionary interest is created when a deed provides that the property transfer is "on condition that" or "only for so long as" the property described in the deed is used, or not used, for certain purposes. The reservation of a reversionary interest in a deed gives the original owner (and the owner's heirs, successors and assigns) a powerful tool to take the land back if promises about future land use are broken. Reversionary interests can be structured in several ways. The change of ownership can occur automatically when the condition is broken or it can occur only if and when the holder of the reversionary interest elects to retake the property once the condition is broken.

An exercise of police power by a municipality to regulate and control the character and use of the property is called A. zoning ordinance B. littoral rights C. riparian rights D. subrogation

A - A zoning ordinance is an exercise of police power. Building codes can be another form of police power.

The government must meet all of the following requirements in order to exercise its right of eminent domain during condemnation except: A. obtain the consent of the property owner B. prove a public good C. pay a fair compensation D. follow proper legal procedures

A - Eminent domain refers to the power possessed by the state over all property within the state, specifically its power to appropriate property for a public use. In some jurisdictions, the state delegates eminent domain power to certain public and private companies, typically utilities, such that they can bring eminent domain actions to run telephone, power, water, or gas lines. In most countries, including the United States under the Fifth Amendment to the Constitution, the owner of any appropriated land is entitled to reasonable compensation, usually defined as the fair market value of the property. Proceedings to take land under eminent domain are typically referred to as "condemnation" proceedings.

The ownership of property by one person only is known as: A. severalty B. joint tenancy C. tenancy in common D. tenancy by entirely

A - Ownership is severed or separated from any form of co-ownership. Tenancy in common, joint tenancy and tenancy by the entirety are ALL forms of co-ownership.

Two brothers, John and Bill, owned valuable property left to them by their father, as joint tenants. Both married later, and then Bill died intestate. His widow would acquire: A. no interest in the property B. half interest as joint tenant with John C. half interest as tenant in common D. one-quarter interest in the property

A - The widow would have no interest in the property since the two brothers were joint tenants, the surviving brother would now own the property in severalty.

All of the ownership rights that transfer with a fee simple estate are known as: A leasehold estate B. the bundle of rights C. quiet enjoyment D. seisin B -

B - All of the ownership rights that transfer with a fee simple estate are the bundle of rights. These rights are: to control, use, possess, enjoy, and dispose of the real property. Remember the word C-U-P-E-D: control, use, possess, enjoy, dispose.

Sandy Jacobs and Eva Cole bought a store building and took title as joint tenants. Cole died testate. Jacobs now owns the store: A as a joint tenancy with right of survivorship B. in severalty C. in absolute ownership under the law of descent D. as a tenant in common

B - Because of the right of survivorship this does not become part of Cole's estate. Jacobs now owns the property in severalty.

A person who has complete control over a parcel of real estate is said to own a: A. leasehold estate B. fee simple estate C. defeasible fee estate D. life estate

B - Fee Simple, also known as fee simple absolute is known as the highest degree of ownership. The other "estate" terms are all much more limited forms of ownership - a life estate expires over time, a leasehold estate has a definite term, and a defeasible estate is limited by a certain event happening.

Which of the following would be considered community property? A a gift of property to the wife during the marriage B. income earned by a spouse during the marriage C. property inherited by the husband during the marriage D. income earned by the wife prior to the marriage

B - In a community property jurisdiction, most property acquired during the marriage (except for gifts or inheritances) is owned jointly by both spouses and is divided upon divorce, annulment or death.

The parts of a property that are normally in common use by all of the condo residents are known as: A. community property B. common elements C. conveyance D. covenant

B - In a condominium, those portions of the property not owned individually by unit owners, but in which an indivisible interest is held by all unit owners generally include the grounds, parking areas, recreational facilities, and external structure of the building

Al Jones, Harold Murphy, and Josh Hagstrom are joint tenants owning a parcel of land. Hagstrom conveys his interest to his friend, Willy Phillips. After the conveyance, Jones and Murphy: A. become tenants in common B. remain joint tenants owning an undivided 2/3 interest in the land C. become joint tenants with Phillips D. continue to be joint tenants with Hagstrom

B - It is possible to be a joint tenant with one party, and a tenant in common with another party. In this case Jones and Murphy are tenants in common with Phillips. Jones and Murphy remain as joint tenants.

If a person lives in an apartment, and owns stock in the corporation possessing the proprietary lease, this is known as a: A. condominium B. cooperative C. time share D. community propert

B - Remember that with a cooperative, or co-op, the person is actually a tenant with stock in the company - not to be confused with a condominium, in which the person actually OWNS the unit.

An undivided interest held by two or more parties, without the right of survivorship is: A. joint tenancy B. tenancy in common C. tenancy in severalty D. tenancy by entirely

B - Tenancy in common is a form of concurrent estate in which each owner, referred to as a tenant in common, is regarded by the law as owning separate and distinct shares of the same property. By default, all co-owners own shares, but their interests may differ in size. (more information)

When a life estate terminates a new person inherits whatever remains in a new estate. The name of the estate which remains is referred to as: A. the right of survivorship B. the remainder estate C. the reversionary right D. the reversionary interest

B - That part of a remainder estate is that which is left from a life estate. Don't confuse this with reversionary interest, which is the future interest that reverts to a grantor or his heirs. An example of a reversionary interest is: a landowner gives land to a city for a park. In the deed there is a reversionary interest which says if the land should ever cease being a park, the ownership would revert to the estate of the original landowner.

Which of the following must apply when land is taken under the right of eminent domain? A. the statue of limitation must pass B. the taking of the property must be for public purpose C. the element of adverse possession must exist D. the government must give constructive notice

B - The most common uses of property taken by eminent domain are for public utilities, highways, and railroads, however it may also be taken for reasons of public safety, such as in the case of Centralia, Pennsylvania. Some jurisdictions require that the government body offer to purchase the property before resorting to the use of eminent domain.

Mr. Ackerman leased a property for five years to Mr. Bones. During this term, Mr. Ackerman died and then Mr. Bones discovered that Mr. Ackerman's interest was a life estate. The owner of the property was correct in advocating which of the following A. Mr. Bones' leasehold estate is valid for the length of the lease B. Mr. Bones' interest was terminated upon Mr. Ackerman's demise C. Mr. Ackerman's heir would receive the fee title D. the owner has an estate in remainder

B - This question illustrates the rare situation where a lease may be terminated by death. The lessor can only lease the property for the term of his life. Upon the lessor's death, he no longer has an interest in the property and the lessee's interest also ceases

A person who owns a fee simple interest in a unit in a multi-unit building together with a specified undivided percentage of all common elements would be the owner of a: A. cooperative B. share in a real estate investment trust C. condominium D. syndicated venture

C - A fee simple interest held in severalty with an individual interest in common areas is a condominium, regardless of the purpose of the use.

Ben and Dave are co-owners of a fee simple estate in a parcel of real estate. Ben dies intestate and leaves no estate to be distributed to his heirs. Dave is neither related to Ben, or a creditor of Ben. Which of the following explains how Dave acquired the interest of Ben? A. adverse possession B. reversionary right C. joint tenancy D. mortgage foreclosure

C - In estate law, joint tenancy is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint tenancy creates a Right of Survivorship. This right provides that if any one of the joint tenants dies, the remainder of the property is transferred to the survivors.

Joint tenancy and tenancy in common, are two ways to own property concurrently with someone else. How does joint tenancy differ from tenancy in common? A. joint tenancy has the unity of possession and tenancy in common does not B. joint tenancy requires the signature of all owners at the closing, and tenancy in common does not C. joint tenancy has the right of survivorship and tenancy in common does not D. unlike joint tenancy, tenancy in common has the unity of interest

C - Joint tenancy is a form of ownership by two or more individuals together. It differs from other types of co-ownership in that the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant. This is called a "right of survivorship." Joint ownership has rather rigid legal limitations and consequences that are sometimes not intended.A tenancy in common is another form of co-ownership. It is the ownership of an asset by two or more individuals together, but without the rights of survivorship that are found in a joint tenancy. Thus, on the death of one co-owner, his or her interest will not pass to the surviving owner or owners but will pass according to his or her will or, if there is no will, by the law determining heirs. More info on joint ownership - There are three types of concurrent ownership, or ownership of property by two or more persons: Tenancy by the Entirety, Joint Tenancy, and Tenancy in Common. A Tenancy by the Entirety can be created only by married persons. Anybody regardless of married status may choose to create a Joint Tenancy or a Tenancy in Common. First of all Tenancy by the Entirety is not used in Colorado we use Joint Tenancy for this purpose instead. Still, the term occasionally makes an appearance on the National side of the licensing exam as some state do use it. So, it is best to know it. Tenancy by the Entirety allows spouses to own property together as a single legal entity. Under a tenancy by the entirety, creditors of an individual spouse may not attach and sell the interest of a debtor spouse: only creditors of the couple may attach and sell the interest in the property owned by tenancy by the entirety. The most important difference between a tenancy by the entirety and a joint tenancy or tenancy in common is that a tenant by the entirety may not sell or give away his interest in the property without the consent of the other tenant. Upon the death of one of the spouses, the deceased spouse's interest in the property devolves to the surviving spouse, and not to other heirs of the deceased spouse. This is called the right of survivorship. Tenants in common do not have a right of survivorship. In a tenancy in common, persons may sell or give away their ownership interest. Joint tenants do have a right of survivorship, but a joint tenant may sell or give away her interest in the property. If a joint tenant sells her interest in a joint tenancy, the tenancy becomes a tenancy in common, and no tenant has a right of survivorship. A tenancy by the entirety cannot be reduced to a joint tenancy or tenancy in common by a conveyance of property. Generally, the couple must Divorce, obtain an Annulment, or agree to amend the title to the property to extinguish a tenancy by the entirety.

Sole ownership by an individual is ownership: A. in common interest B. in gross C. in severalty D. in joint tenancy

C - Severalty is the quality or condition of being separate and distinct. According to law it means a separate and individual right to possession or ownership that is not shared with any other person. Land, property, or an estate owned in severalty.

Herman sold his unit and had to pay a stock transfer fee. He sold his: A. townhome B. condominium C. cooperative D. timeshare

C - The definition of a cooperative is that you own shares in the property, and have a right to occupy a particular unit.

Private property that is abandoned is taken by the local government. This is an example of: A. police power B. taxation C. escheat D. eminent domain

C - This is a classic example of property that government can take over through escheat, another example would be a person dying without a will and no living relatives. The term is often now applied to the transfer of the title to a person's property to the state when the person dies intestate without any other person capable of taking the property as heir. For example, a common-law jurisdiction's intestacy statute might provide that when someone dies without a will, and is not survived by a spouse, descendants, parents, grandparents, descendants of parents, children or grandchildren of grandparents, or great-grandchildren of grandparents, then the person's estate will escheat to the state.

One important element of an estate held in joint tenancy is: A. the joint tenants must be husband and wife B. there is no right of survivorship C. there cannot be more than two people sharing ownership

D - A joint tenancy or joint tenancy with right of survivorship (JTROS or JTWROS) is a type of concurrent estate in which co-owners have a right of survivorship, meaning that if one owner dies, that owner's interest in the property will pass to the surviving owner or owners by operation of law, and avoiding probate. The deceased owner's interest in the property simply evaporates and cannot be inherited by his or her heirs. Under this type of ownership, the last owner living owns all the property, and on his or her death the property will form part of their estate. Unlike a tenancy in common, where co-owners may have unequal interests in a property, joint co-owners have an equal share in the property.

What is a life estate? A. a remainder interest B. property given for the grantor's lifetime C. an estate given for the functional lifespan of the property D. property given for the duration of an individual's lifetime

D - A life estate is an interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons. A grantor is someone granting a life estate. A grantee is someone receiving a life estate.