REE 3043 EXAM 1 FSU BAILEY

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156 Terms

1
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When viewed as a tangible asset, real estate can be defined as the land and its permanent improvements. Improvements on the land include:

fences

walkways

sewer systems

streets

fences

2
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Real estate is property, which can be either a tangible or an intangible asset. Which of the following would be considered an intangible asset?

Land

Building

Mortgage

Motor home

mortgage

3
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When the value of land is considered, it is important to distinguish between land and raw land. Raw land refers to a(n):

building site

structure on the land

property's infrastructure

area that does not include any improvements

area that does not include any improvements

4
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The demand for real estate derives from the need that participants in the user market have for shelter and convenient access to other locations. The primary participants in the user market include all of the following EXCEPT

owner occupants

tenants

renters

pension fund managers

pension fund managers

5
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A market where tenants negotiate rent and other terms with property owners or their managers is referred to as a:

Property Market

User Market

Housing Market

Capital Market

user market

6
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The actions of local, state, and federal governments affect real estate values

Primarily through user markets

Primarily through capital markets

Primarily through their taxation policies

Through all the above

All of the above

7
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What portion of households owns their house?

2/3

8
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Of the following asset categories, which class has the greatest aggregate market value?

Corporate equities

Mortgage debt

Government debt

Nongovernment real estate

Nongovernment real estate

9
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Storm water drainage systems are best described as:

Tangible assets

Improvements to the land

Intangible assets

Improvements on the land

improvements to the land

10
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What is the single largest asset category in the portfolio of a typical U.S. household?

Housing

Consumer durables

Stocks

Bonds

housing

11
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Real estate markets differ from other asset classes by having all of the following characteristics except

Local market

High transaction costs

Segmented market

homogeneous product

homogeneous product

12
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Which of the following is the least important to the location of commercial properties?

Access to customers

Visibility

Access to schools

Availability of communications infrastructure

access to schools

13
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Which of the following is not a form of real property right?

Lien

Easement

Leasehold

License

license

14
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Which of these easements is most likely to be an easement in gross?

Common wall easement

Driveway easement

Drainage easement

Power line easement

power line easement

15
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Rules used by courts to determine whether something is a fixture include all except:

Intention of the parties

Manner of attachment

Law of capture

Character of the article and manner of adaptation

Law of capture

16
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Which of the following is a titled estate?

Fee simple absolute

Fee simple conditional

Life estate

All of these

all of these

17
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Which of these forms of co-ownership could best be described as "normal ownership," except that multiple owners can have unequal ownership interest in the same property?

Tenancy in common

Joint tenancy

Tenancy by the entirety

Condominium

tenancy in common

18
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Which of these marriage-related forms of co-ownership gives each spouse a one-half interest in any property that is "fruits of the marriage"?

Dower

Curtesy

Community property

Elective share

community property

19
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Which of these liens has the highest priority?

First mortgage lien

Mechanics' lien

Property tax lien

Second mortgage lien

property tax lien

20
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Restrictive covenants for a subdivision usually can be enforced by:

Subdivision residents

Lenders with mortgage loans in the subdivision

Local government

a and b, but not c

a and b, not c

21
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Timeshare programs can involve which of the following claims or interests?

Fee simple ownership

Leasehold interest

License

All of these are possible

all of these

22
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Every condominium buyer needs to know the details of which document(s):

Condominium declaration

Bylaws

Proprietary lease

a and b, but not c

a and b, not c

23
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A principal definition of real estate is as a bundle of rights associated with the possession, use, and disposition of property. Each of the following is a fundamental characteristic of property rights EXCEPT:

they are enforceable by the government.

they apply only to tangible assets.

they are nonrevocable.

they are enduring.

they apply only to tangible assets

24
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Property rights can be divided into two classes, real and personal. Which of the following is an example of real property?

Vehicles

Stocks and bonds

Patents

Commercial building

commercial building

25
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A fixture is an object that formerly was personal property but has become real property. Of the following four rules for determining whether an object has become a fixture, which is the most dominant (i.e. if there is a conflict, which rule prevails)?

Manner of the attachment

Character of the article and manner of adaptation

Intention of the parties

Relation of the parties

intention of parties

26
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Which of the following items would most likely be considered a fixture?

Custom bookshelves

Refrigerator in a single-family residence being sold

Fence installed by the tenant of a rental property

Antique table lamp

custom bookshelves

27
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Property rights can be dismantled into lesser bundles, referred to as interests, which can then be held by different individuals. Interests in real property that include possessions are referred to as:

fixtures

townships

licenses

estates

estates

28
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Which of the following types of ownership estates is the most complete bundle of rights, and therefore carries the greatest value?

Fee simple absolute

Fee simple conditional

Ordinary life estate

Legal life estate

fee simple absolute

29
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An easement is the right to use land for a specific and limited purpose. Which of the following easements involves a relationship between two parcels of land, is a permanent feature of both parcels involved, and gives the dominant parcel some intrusive use of the servient parcel?

Affirmative easement appurtenant

Negative easement appurtenant

Easement in gross

License

affirmative easement appurtenant

30
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Which of the following types of liens is automatically superior to any other lien?

Property tax and assessment lien

Mortgage lien

Lien arising from a court judgment unrelated to ownership of the property

Mechanics' lien

property tax and assessment lien

31
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Which of the following types of direct co-ownership is a form of joint tenancy for husband and wife?

Tenancy in common

Tenancy by the entirety

Condominium

Partnership

tenancy by the entirety

32
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Bill and Mike go in together to purchase 342 acres of land to use for hunting and family vacations. Ten years later, Bill dies and Bill's wife wants to sell his half of the land. Mike informs her that, unfortunately, she has no claim to the land and that upon Bill's death, his ownership interest transferred to Mike. What type of co-ownership did Bill and Mike have?

Tenancy by the entireties

Tenancy in common

Joint tenancy

Condominium

joint tenancy

33
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Which of these is not a requirement of a valid deed?

Competent grantor

Competent grantee

In writing

Delivery

competent grantee

34
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The interest being conveyed by a deed is specified in the:

Words of conveyance

Habendum clause

Property description

Exceptions and reservations clause

Habendum clause

35
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The "highest quality" form of deed is the:

General warranty deed

Special warranty deed

Deed of bargain and sale

Quitclaim deed

general warranty deed

36
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A deed used mainly to clear up possible "clouds" or encumbrances to title (conflicting interests) is the:

General warranty deed

Special warranty deed

Deed of bargain and sale

Quitclaim deed

quit claim deed

37
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If a landowner sells the front part of a parcel of land, retaining the back portion as a "land-locked" parcel, and if there is an existing informal path across the front parcel to the back one, the seller is likely to retain the path as a (an):

Easement in gross

Joint driveway easement

Implied easement by prior use

Easement by estoppel

implied easement by prior use

38
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If a neighboring land owner drives across a person's land openly and consistently for a number of years the neighbor may acquire an easement by:

Estoppel

Implication

Accretion

Prescription

prescription

39
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If documents conveying interests in real property are properly recorded in the public records, then they are binding or enforceable on all persons, regardless of whether those persons are aware of the documents, by the:

Statute of frauds

Recording statutes

Doctrine of constructive notice

Doctrine of actual notice

doctrine of constructive notice

40
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Which of these is a widely used form of "evidence of title

Abstract of title

Title insurance commitment

Torrens certificate

Title certificate

Title insurance commitment

41
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The most common form of legal description for urban residential property is the:

Street address

Tax parcel number

Plat lot and block number

Title description

Plat lot and block number

42
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Factors that make it uniquely difficult to establish clear title in real estate as compared to most personal property items include:

Size of real estate

Length of the ownership history in real estate

Value of real estate

Land use controls.

length of the ownership history in real estate

43
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A deed is a special form of written contract used to convey a permanent interest in real property. Unlike most contracts, a deed requires:

both parties to be legally competent and of legal majority age.

only the grantee to be legally competent and of legal majority age.

only the grantor to be legally competent and of legal majority age.

both parties to make promises to perform.

only the grantor to be legally competent and of legal majority age.

44
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The type of deed offered by the grantor is communicated through a phrase such as "does herby grant, bargain, sell and convey unto . . ." This clause is referred to as the:

recital of consideration

words of conveyance

covenant

habendum clause

words of conveyance

45
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While the vast majority of conveyances of real property are private grants through a deed, there are multiple ways in which voluntary conveyance can occur without a deed. Which of the following types of easements can occur if a landowner gives an adjacent landowner permission to depend on her land? (E.g. A landowner may give a neighbor permission to rely on sewer access or drainage across his or her land.)

Easement by prior use

Easement of necessity

Easement by estoppel

Dedication

easement by estoppel

46
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When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible for property to be voluntarily conveyed without a deed. If the landlocked parcel has no prior path of access, which of the following types of easements will automatically be created to make the land useful?

Easement by prior use

Easement of necessity

Easement by estoppel

Dedication

easement of necessity

47
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Unlike other forms of evidence of title, title insurance guards the grantee against certain risks. However, there are a number of important limits to title insurance. Which of the following is an example of the limits to title insurance?

Group of answer choices

It does not protect the grantee from the threat of physical damage to the property.

It does not protect a grantee against the legal costs of defending the title.

It does not protect a grantee against loss of the property in case of an unsuccessful title defense.

It does not protect against legal attack on the owner's title arising from a claim that diminishes the owner's rights of use.

It does not protect the grantee from the threat of physical damage to the property.

48
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Zoning is an exercise of which type of general limitation on property rights?

Eminent domain

Taxation

Police power

Escheat

police power

49
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A comprehensive plan usually deals with which of the following elements?

Land uses

Population

Public Services

All of the above

all of the above

50
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Property taxes are a main source of revenue for:

The federal government

School districts

Local governments

State governments

Both local governments and school districts

Both local governments and school districts

51
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The authority for approving site plans for large projects ultimately rests with the:

Elected governing commission or council

Mayor or city manager

Planning board or commission

Planning board or commission staff

Elected governing commission or council

52
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The most accurate conclusion about the regessivity of the property tax is that it is:

Regressive

Not regressive

Based on ability to pay

Regressive, but when benefits are considered, the net result is not regressive.

Regressive, but when benefits are considered, the net result is not

53
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Traditional land use controls (pre-1970) include:

Zoning

Building codes

Subdivision regulations

All three: a, b, and c.

All three

54
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Radon gas is:

A naturally occurring result of geologic activity

A relatively recent phenomenon caused by the earth's warming

Important only in the western United States

Regarded as a nuisance but not a health hazard

A naturally occurring result of geologic activity

55
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"New urbanism" is a term used to describe:

Growth management laws enacted by state governments.

Improvement of transportation systems to encourage dispersion of a city's population

The requirement that infrastructure be available concurrently with new development

The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian-oriented.

The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian-oriented.

56
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Elements of traditional zoning include all except:

Performance standards

Setback requirements

Bulk limits

Land use categories

performance standards

57
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Externalities in land use include all except:

Leap-frog development

Increase storm runoff from paving

Traffic congestion

Inability to judge the quality of a structure, once built

Inability to judge the quality of a structure, once built

58
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Development taking place in rural areas well beyond the urban fringe is commonly referred to as:

urban sprawl

holdout

urban service areas

homestead

urban sprawl

59
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Growth management laws at the state level require local jurisdictions to plan for and meet certain requirements. One such requirement prohibits local development unless adequate infrastructure, schools, police/fire protection, and social services have been put in place first. This requirement is referred to as the:

economic and environmental impact requirement

concurrency requirement

affordable housing requirement

extraterritorial jurisdiction requirement

concurrency requirement

60
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A contemporary planning movement that explicitly advocates a traditional grid pattern of development designed to give pedestrian life priority over motor vehicles (e.g., including narrowed streets with houses close to the street and garage access through side alleys) is commonly referred to as:

urban sprawl

urban service area

traditional residential planning

new urbanism

new urbanism

61
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Which of the following tools of public land use control represents the earliest method of police power to regulate land use? (Hint: Standards for energy efficiency and sustainability are the most recent trends in the application of this land use control)

Subdivision regulation

Zoning

Building Codes

Planned Unit Developments

building codes

62
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When a zoning ordinance is revised, some existing land uses then fall outside the new zoning classification. These land uses are referred to as:

special uses

nonconforming uses

conforming uses

exclusionary uses

nonconforming uses

63
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State and federal control of land uses has increased greatly over the past 40 years due in part to an increased awareness of environmental hazards. Which of the following federal environmental control laws was responsible for establishing the "Superfund" to finance emergency responses and cleanups of abandoned and unregulated waste dumps?

Clean Water Act

Resource Conservation and Recovery Act

Toxic Substances Control Act

Comprehensive Environmental Response Compensation and Liability Act

Comprehensive Environmental Response Compensation and Liability Act

64
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Negative externalities can diminish a property's value by imposing costs on the community at large. In order to offset this detrimental impact, economists advocate "internalizing" these externalities by implementing:

performance standards

impact fees

growth moratoriums

planned unit developments

impact fees

65
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A major problem in buildings constructed prior to the early 1970's, which of the following environmental hazards commonly associated with insulation has been the focus of costly cleanups at many public buildings, especially schools?

Asbestos

Radon

PCBs (Polychlorinated biphenyls)

LUSTs (leaking underground storage tanks)

asbestos

66
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The right of government to acquire private property, without the owner's consent, for public use in exchange for just compensation is referred to as:

inverse condemnation

regulatory taking

eminent domain

dedication

eminent domain

67
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Given the following information, calculate the total annual tax liability of the homeowner. Market value of property: $311,249, Assessed value of property: 0.86 % of the market value, Exemptions: $22,866, Millage Rate: 21 mills.

NOTE:

All numeric answers on the quiz and exams must be entered as positive numbers in the following formats if numbers or percentages: If the number answer was $45,000 or -$45,000. If the percentage was 9.54% or - 9.54%. The questions are worded in a way that a positive number or positive percentage will answer them correctly.

The correct format would be: "45650" or ".0954" or "0.0954"

5140.97

68
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physical assets that can be owned

tangible property

69
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non-physical assets such as stocks, bonds, mortgages, leases

intangible property

70
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structures are what?

improvements on the land

71
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Excavation and fill

sewers and other utilities

roads and driveways

improvements to the land

72
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-Market for the physical real estate

-"buyers" receive right to use some space

-where rental rates are determined

User Market

73
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-RE competes for funds in market with other asset classes such as stocks and bonds

-investors select a mix of investments based on expected return and risk

capital markets

74
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-market for ownership claims to RE assets

-buyers/owners receive rights to cash flows generated by leasing space to tenants

-market is integrated no segmented

Property (Asset) Market

75
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-heterogenous products

-immobile products

-localized markets

-segmented markets

-privately negotiated deals with high transaction costs

Characteristics of Real Estate Markets

76
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-freedoms guaranteed by constitution

-Supreme Court interpretations of constitution

personal rights

77
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-exclusive possession

-enjoyment of the use or benefit: use, collect rents, harvest

-freedom to dispose as one pleases: sell, convert, rebuild

property rights

78
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-rights in land and its permanent structures

-surface of the earth and improvements

-air, up to reserved air space or tallest structure

-beneath the earth as far as technology allows: minerals, oil, and gas, water

real property

79
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-all other property

-personal and household goods

-intellectual property

-music

personal property

80
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-real property that formerly was personal property

fixture

81
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Rules to determine when something become a fixture?

-manner of attachment

-character of the article

- manner of adaptation

-intention of parties

-relation of the parties

82
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-dominant rule

-customary assumptions of the realm

-ex: kitchen appliances in a single family residence vs appliance in apt

intention of parties

83
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-variant of rule of intention

-trade fixtures

-fences and other agricultural improvements

-items installed by a tenant in a residence

relation to parties

84
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any set of rights in real property

interest

85
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a real property interest that includes the right of exclusive possession

estate

86
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-easements

-restrictive covenants

-liens

nonpossessory interest

87
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-for a specific period of time

-must be written if for more than one year

-written lease contract governs entirely

tenancy for years

88
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-no definite length of time

-often by oral agreement

-state law governs notice of termination

periodic tenancy

89
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the right to use land for a specific and limited purpose

easement

90
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-right of use a (dominant) parcel of land "enjoys" over an adjacent (servant) parcel

-"runs with the land"

easement appurtenant

91
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-driveway or accès right of way

-sewer line

-drainage

-common wall

affirmative easement

92
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-light and air easement

-scenic easement

negative easement

93
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-right to use land, unrelated to any other parcel

-extract minerals, oils, build roadway, lay pipeline, etc.

-transferable separately from land title or ownership

-no dominant parcel- only servant parcels

easement in gross

94
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-conveys all rights of the easement

-recipient can convey access to others

exclusive easement in gross

95
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-rights limited to one user only

-recipient cannot extend access to others

-owner can convey access to others

nonexclusive easement in gross

96
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-similar to easement in gross

-conveys permission rather than right

-revocable

-automatically terminated at the death of the grantor or sale of the land

License

97
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-covenants that impose restrictions on land use

--no chain link fence, no RV, boats in street view, etc.

restrictive covenants

98
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-an interest in property as security for an obligation

-usually a debt

lien

99
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-arise from events unrelated to the property

-court awarded damages

-federal tax liens

general liens

100
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-arise from ownership and use of the property

-mortgage

-mechanics lien

-property tax or assessment lien

specific lien