Real Estate Salesperson Exam (National Portion) Ownership, Estates, and Liens Summary

Fee simple absolute gives the owner the full bundle of rights: to possess, use, enjoy, exclude others, and dispose of the property. It has no time limit and can be inherited.

Wrong choices

• Life estate: A life estate lasts only for a person's lifetime.
• Fee simple determinable: A determinable fee can end automatically if a condition is broken.
• Estate for years: An estate for years is a lease, not ownership.

Joint tenancy includes the right of survivorship: when one joint tenant dies, that share goes to the surviving joint tenants, not to the deceased owner's heirs.

Wrong choices

• Tenants in common: Tenants in common have no right of survivorship; each share passes to heirs.
• Owners in severalty: Severalty means one owner alone.
• Life tenants: A life tenant holds a life estate, not co-ownership with survivorship.

The bundle of rights includes possession, control, enjoyment, exclusion, and disposition. These rights are always subject to government powers such as police power, so an owner has no right to break zoning laws.

Wrong choices

• Possess the property: Possession is one of the rights in the bundle.
• Exclude others from the property: The right to exclude is part of the bundle.
• Sell or give away the property: The right of disposition is part of the bundle.

In a condominium, each owner holds fee title to a unit plus an undivided interest in the common elements (halls, roof, grounds). In a cooperative, the residents own shares in a corporation and lease their units.

Wrong choices

• Shares of stock in a corporation that owns the building: Stock ownership with a proprietary lease describes a cooperative.
• A leasehold in the land under the building: Condominium owners usually own, not lease, their share of the land.
• Only the right to use the unit for one week a year: That describes a timeshare.

When a life estate ends, the property goes either back to the grantor (reversion) or to a named third person (remainder). The niece is the remainderman.

Wrong choices

• Reversion: A reversion is when the property returns to the original grantor or her heirs.
• Leasehold: A leasehold is a tenant's right to possess under a lease.
• Easement: An easement is a right to use land, not a future ownership interest.

A joint tenancy needs the four unities, remembered as T-T-I-P: same time of acquiring, same title (deed), equal interest, and equal right of possession.

Wrong choices

• Time, money, interest, and survivorship: Money and survivorship are not among the four unities.
• Title, consent, possession, and recording: Consent and recording are not among the four unities.
• Interest, marriage, title, and time: Marriage is not required for joint tenancy.

Most liens are ranked by the date they were recorded ("first in time, first in right"). Real property tax and special assessment liens are the main exception: they usually come first, ahead of mortgages recorded earlier.

Wrong choices

• A second mortgage: A second mortgage is junior to the first mortgage.
• A judgment lien: Judgment liens are usually ranked by the date they attach.
• A mechanic's lien: Mechanic's lien priority depends on state rules, but tax liens come first.

When one joint tenant sells, the buyer does not share the unities of time and title, so the buyer becomes a tenant in common. The remaining owners stay joint tenants with each other. D owns 1/3 as a tenant in common.

Wrong choices

• A, B, and D are all joint tenants: D received title at a different time and by a different deed, so D cannot be a joint tenant.
• The whole joint tenancy ends and all become tenants in common: Only C's share leaves the joint tenancy; A and B remain joint tenants between themselves.
• The sale is void because joint tenants cannot sell: A joint tenant may sell her interest; doing so breaks the joint tenancy for that share.

A tenancy at sufferance is the weakest leasehold: a tenant who once had a lawful right stays after it ends without the landlord's consent. If the landlord accepts rent, it may turn into a periodic tenancy under state law.

Wrong choices

• Periodic tenancy: A periodic tenancy renews automatically, such as month to month, with the landlord's consent.
• Estate for years: An estate for years has a definite end date that has already passed here.
• Tenancy at will: A tenancy at will exists with the landlord's consent for no fixed term.

A life estate pur autre vie lasts for the life of someone other than the life tenant. Here the son owns it, but it ends when the daughter dies.

Wrong choices

• Fee simple absolute: The son's interest ends when the daughter dies, so it is not fee simple.
• Remainder interest: A remainder is the future interest of the person who receives the property after a life estate.
• Leasehold estate: A leasehold is a tenant's right under a lease.