RE Lesson 2: Estates in Land and Methods of Holding Title. Quiz Q's

A possessory ownership right or interest in real property is a/an:

A.lien

B.encumbrance

C.fixture

D.estate

A.lien

B.encumbrance

C.fixture

D.estate

An estate is the right to possess and have exclusive use of real property.

Which of the following statements concerning estates is correct?

A.A life estate is a leasehold estate

B.An estate may be held with another estate in the same property

C.Title to an estate must pass using a grant deed

D.An estate always gives the right of immediate possession

A.A life estate is a leasehold estate

B.An estate may be held with another estate in the same property

C.Title to an estate must pass using a grant deed

D.An estate always gives the right of immediate possession

Of the following, which is the best definition of a fee simple absolute estate?

A.Title and ownership without limitations

B.An estate for years

C.An estate based on a condition subsequent

D.The greatest interest one can own in land

A.Title and ownership without limitations

B.An estate for years

C.An estate based on a condition subsequent

D.The greatest interest one can own in land

Estates of inheritance or estates of infinite duration are known as:

A.estates in fee

B.life estates

C.fee simple defeasibles

D.estates at will

A.estates in fee

B.life estates

C.fee simple defeasibles

D.estates at will

An estate that is inheritable and of infinite duration is an estate in fee, commonly called a fee simple estate.

The phrase "of infinite duration" would be associated with which type of estate?

A.Estate for years

B.Periodic estate

C.Less-than-freehold estate

D.Estate of inheritance

A.Estate for years

B.Periodic estate

C.Less-than-freehold estate

D.Estate of inheritance

An estate of inheritance -- in other words, a fee simple estate -- is an estate that can potentially last forever.

Which of the following is not a characteristic of a fee simple estate?

A.Free of real encumbrances

B.Freely transferable, with or without consideration

C.Freely inheritable, by will or intestate succession

D.Of infinite duration

A.Free of real encumbrances

B.Freely transferable, with or without consideration

C.Freely inheritable, by will or intestate succession

D.Of infinite duration

Most fee simple estates have at least some encumbrances against them: one or more liens, an easement, or private restrictions. Even though a fee simple estate may have no encumbrances, that isn't a basic characteristic of a fee simple estate.

The grantee's deed includes a condition that prohibits the sale of alcoholic beverages on the property. Which of the following is correct?

A.The condition can apply only during the grantor's lifespan

B.The condition is irrelevant; fee simple ownership is always absolute

C.The condition is unenforceable, because it violates the constitutional repeal of prohibition

D.Violation of the condition could result in forfeiture of title

A.The condition can apply only during the grantor's lifespan

B.The condition is irrelevant; fee simple ownership is always absolute

C.The condition is unenforceable, because it violates the constitutional repeal of prohibition

D.Violation of the condition could result in forfeiture of title

Derrick conveyed title to a dwelling to Shana by means of a grant deed. Shana's title is subject to a condition which provides for a forfeiture of title if the property is ever used for the sale of alcoholic beverages. Shana's estate in the property is a/an:

A.estate in forfeiture

B.fee simple defeasible

C.fee simple absolute

D.leasehold estate

A.estate in forfeiture

B.fee simple defeasible

C.fee simple absolute

D.leasehold estate

Because her title is conditioned on doing or not doing something, Shana holds a fee simple defeasible estate.

More than one estate can exist in the same property.

True

Multiple estates can exist in one property. For instance, the owner of a property has a freehold estate, while the person leasing the same property has a leasehold estate. This situation is known as privity.

The fee simple estate is of potentially infinite duration, and the holder of the estate has the entire bundle of rights.

True

A fee simple estate is the greatest estate. It includes all of the rights of land ownership.

An estate in land does not convey possessory rights. Instead, an estate conveys a "use right" which is limited to the use for which the estate was created.

False

An estate in land is a possessory interest. This means it includes the right to possess and occupy the property.

In contrast to the owner of a fee simple absolute, the owner of a fee simple defeasible does not have full ownership rights to the property.

False

The owner of a fee simple defeasible estate holds the same interest as the owner of a fee simple absolute estate, but his interest is subject to termination.

When title to real estate is transferred, if the grantor intends to deliver a fee simple absolute interest to the grantee, that intention must be stated in the deed.

False

When someone who owns property in fee simple absolute transfers title by deed, it is presumed that the grantee receives a fee simple absolute estate.

A fee simple estate is transferable, inheritable, and perpetual.

True

A fee simple estate is transferable, inheritable, and perpetual.

A life estate is a form of:

A.freehold estate

B.fee simple estate

C.leasehold estate

D.estate at will

A.freehold estate

B.fee simple estate

C.leasehold estate

D.estate at will

A life estate is a freehold estate. However, it is not a type of fee simple estate

Jerry grants Kerry a life estate, measured according to the life of Larry. Kerry dies before Larry does. What happens to the life estate?

A.It escheats to the state

B.It reverts to Jerry

C.It passes to the heirs or devisees of Kerry, for the rest of the life of Larry

D.It passes to Larry for the rest of his life

A.It escheats to the state

B.It reverts to Jerry

C.It passes to the heirs or devisees of Kerry, for the rest of the life of Larry

D.It passes to Larry for the rest of his life

The measuring life for this life estate is Larry, so for as long as Larry remains alive, Kerry's heirs or devisees may retain the life estate.

The holder of a life estate, if the life tenant is also the measuring life, cannot:

A.add an upstairs bathroom

B.rent out horse stables on the property and collect the rents

C.sell the life estate interest

D.will the life estate interest to another party

A.add an upstairs bathroom

B.rent out horse stables on the property and collect the rents

C.sell the life estate interest

D.will the life estate interest to another party

The life tenant (if she is also the measuring life) cannot will her interest in the life estate, because the life estate will terminate upon her death. A life tenant who is also the measuring life may sell her interest, but the buyer will receive an interest that will expire upon the original life tenant's death.

Adam leased a property from Casey for a five-year term. Casey died, at which point Adam found out that Casey had only a life estate in the property, with Casey's life as the measuring life. The lease is:

A.valid for the remaining five years

B.valid until invalidated by the executor of Casey's estate

C.valid only during the life of Casey

D.invalid since it is fraudulent and illegal to lease a life estate

A.valid for the remaining five years

B.valid until invalidated by the executor of Casey's estate

C.valid only during the life of Casey

D.invalid since it is fraudulent and illegal to lease a life estate

A person with a life estate may lease the property to another person, but the lease is effective only until the end of the measuring life. At that point, the property will either revert back to the grantor or pass to a third party holding an estate in remainder.

Washington deeds Mount Vernon to Adams for the life of Jefferson. Which of the following statements is true?

A.Adams holds a life estate; Washington holds an estate in remainder

B.Jefferson holds a life estate; Adams holds an estate in reversion

C.Adams holds a life estate; Washington holds an estate in reversion

D.Adams holds a fee simple estate; Jefferson holds a life estate

A.Adams holds a life estate; Washington holds an estate in remainder

B.Jefferson holds a life estate; Adams holds an estate in reversion

C.Adams holds a life estate; Washington holds an estate in reversion

D.Adams holds a fee simple estate; Jefferson holds a life estate

Adams holds a life estate, since he holds the property for the life of Jefferson. Since no one else is specified as receiving a remainder interest, it can be assumed that upon Jefferson's death, the property will revert back to the grantor (Washington) or his heirs.

The person entitled to possession of the property during the measuring life.

Life Tenant

In connection with a life estate, a future interest held by someone other than the grantor.

A remainder interest is a future interest held by someone other than the grantor of the life estate. It will become possessory when the life estate ends.

A freehold estate that lasts only as long as a specified person lives.

Life Estate

In connection with a life estate, a future interest held by the grantor or her heirs.

Reversion

The lifetime that determines the duration of the life estate.

Measuring Life

A reversionary interest would be held by a:

A.state government under the right of eminent domain

B.mortgagee in the event of default by the borrower

C.lessor under the terms of a lease

D.person who gained title through adverse possession

A.state government under the right of eminent domain

B.mortgagee in the event of default by the borrower

C.lessor under the terms of a lease

D.person who gained title through adverse possession

A lessor (landlord) has a reversionary interest in the leased property. When the lease expires and the tenant vacates, the property will revert to the lessor.

Less-than-freehold estates are estates owned by:

A.trust deed beneficiaries

B.holders of easements

C.lessees

D.grantees of life estates

A.trust deed beneficiaries

B.holders of easements

C.lessees

D.grantees of life estates

Less-than-freehold (leasehold) estates are held by lessees. Grantees of life estates (who are called life tenants) have freehold estates. Deed of trust beneficiaries and easement holders don't have either type of estate, since their interests in the property are nonpossessory.

Joan Johns leases a commercial property from Steve Smith. What type of estate does Joan hold?

A.Freehold estate

B.Estate in reversion

C.Less-than-freehold estate

D.Life estate

A.Freehold estate

B.Estate in reversion

C.Less-than-freehold estate

D.Life estate

A lessee holds a leasehold, or less-than-freehold, estate.

An individual with a leasehold estate in a rented store would have a:

A.fee simple estate

B.remainder interest

C.chattel real

D.grant of non-permissive use

A.fee simple estate

B.remainder interest

C.chattel real

D.grant of non-permissive use

A lease is an example of a chattel real, which is personal property that is closely tied to real estate.

Which of the following would be considered an interest in personal property?

A.Improvements constructed on the land

B.Mineral rights

C.A leasehold estate

D.Growing trees in a natural forest

A.Improvements constructed on the land

B.Mineral rights

C.A leasehold estate

D.Growing trees in a natural forest

A lease is classified as personal property. (Because it is personal property that is closely related to real estate, a lease may be referred to as a chattel real.)

Of the following choices, which one contains only items of real property?

A.Land, harvested grain, unextracted oil

B.Flowing water, a leasehold estate, mineral rights

C.Land, cultivated crops, lumber

D.Land, growing trees, running stream

A.Land, harvested grain, unextracted oil

B.Flowing water, a leasehold estate, mineral rights

C.Land, cultivated crops, lumber

D.Land, growing trees, running stream

The land itself, natural attachments, and riparian rights are all considered part of the real property. (Harvested grain, a lease, and lumber are classified as personal property.)

If a person leases a property for a period of six months, what type of interest would he have?

A.Estate from period to period

B.Estate for years

C.Estate at will

D.Estate at sufferance

A.Estate from period to period

B.Estate for years

C.Estate at will

D.Estate at sufferance

Any lease for a fixed term (a period with specified beginning and ending dates) is an estate for years, even if the lease period is less than a year. It may also be referred to as a term tenancy.

An estate in real property for a specific period of time, in exchange for payment of rent, is known as a/an:

A.freehold estate

B.periodic tenancy

C.month-to-month tenancy

D.estate for years

A.freehold estate

B.periodic tenancy

C.month-to-month tenancy

D.estate for years

Any leasehold estate that will expire after a specified period of time is an estate for years (also called a term tenancy).

A family leases a vacation property for the months of July and August. This is an example of a/an:

A.estate for years

B.periodic estate

C.month-to-month tenancy

D.fee simple defeasible

A.estate for years

B.periodic estate

C.month-to-month tenancy

D.fee simple defeasible

Any lease for a fixed term (a period with specified beginning and ending dates) is an estate for years, even if the lease period is less than a year. It may also be referred to as a term tenancy.

Advance notice of termination is required, under common law, for which of the following estates?

A.Estate for years

B.Estate at will

C.Estate at sufferance

D.None of the above

A.Estate for years

B.Estate at will

C.Estate at sufferance

D.None of the above

Under common law, the only type of leasehold estate that requires advance notice of termination is a periodic estate (such as a month-to-month tenancy), which automatically renews itself unless notice of termination is given. So none of the options listed here would require advance notice of termination under common law. Note, however, that California law requires 30 days' notice to terminate an estate at will.

A tenant remained in possession of the property after her lease expired (without agreement by the landlord). What sort of tenancy is this?

A.Estate for years

B.Estate at will

C.Estate at sufferance

D.Estate of unlawful detainer

A.Estate for years

B.Estate at will

C.Estate at sufferance

D.Estate of unlawful detainer

When a holdover tenant stays on without the landlord's consent after a lease has expired, it's called an estate at sufferance or a tenancy at sufferance.

A leasehold interest falls short of an estate in land.

False

A leasehold interest includes the right of possession and therefore is an estate in land.

A handyman who is given free lodging in return for services provided has a tenancy at will.

True

When a tenant is in possession with the owner's permission, but no rent is paid and there's no specified term, it's a tenancy at will.

Linda and Harold rented a beach house for three months. Their interest in the land is referred to as a term tenancy.

True

Any lease that has definite starting and ending dates is a term tenancy.

Ken's landlord asked him to be sure to move out by the lease's termination date because the home had been leased to a new tenant. Ken stayed on anyway. He is now considered a tenant at sufferance.

True

A holdover tenant like Ken is a tenant at sufferance.

A written lease that specifies a term of just twenty-eight days is a periodic tenancy.

False

A lease with definite beginning and ending dates is a term tenancy, no matter how brief the term.

A tenant at sufferance does not hold an estate in land.

True

A tenancy at sufferance is not an estate, nor is it a legal interest in the property.

If a person takes title to real property in severalty, the ownership is held:

A.in common

B.by joint tenants

C.by an individual

D.by a partnership

A.in common

B.by joint tenants

C.by an individual

D.by a partnership

Ownership in severalty means ownership by one individual.

In real property law, tenancy most nearly means:

A.the landlord-tenant relationship

B.a method or mode of owning real property

C.the obstinacy of a holdover lessee

D.rights to a future interest in property

A.the landlord-tenant relationship

B.a method or mode of owning real property

C.the obstinacy of a holdover lessee

D.rights to a future interest in property

Tenancy refers to a method or mode of holding title to real property, such as tenancy in common or joint tenancy. It also refers to a method or mode of holding a leasehold interest, such as term tenancy or periodic tenancy.

Tenancy in common requires unity of:

A.time

B.title

C.possession

D.All of the above

A.time

B.title

C.possession

D.All of the above

Joint tenancy requires unity of interest, time, title, and possession. Tenancy in common, however, requires only unity of possession.

If several people own property as tenants in common, each tenant in common:

A.can exclude the other tenants from possession or use of the property

B.must be mentioned in one single title instrument (one will or deed)

C.has the right to possession of all the property

D.must receive title at the same time

A.can exclude the other tenants from possession or use of the property

B.must be mentioned in one single title instrument (one will or deed)

C.has the right to possession of all the property

D.must receive title at the same time

A tenant in common has the right to possession of the entire property; none of the tenants in common can exclude any of the others from possession or use. Tenants in common do not need to receive their interests at the same time or in the same title instrument.

If two persons wish to hold title to real property as tenants in common, it is a requirement that:

A.title must be acquired at the same time

B.they must enjoy equal rights of possession

C.they must have equal interests

D.they must have unequal interests

A.title must be acquired at the same time

B.they must enjoy equal rights of possession

C.they must have equal interests

D.they must have unequal interests

Tenants in common may have either equal or unequal interests; for instance, two tenants in common may own the property 50-50 or 60-40 (or 70-30, etc.). However, no matter what the ownership percentages are, both tenants in common have the right to possession and use of the entire property. This is called unity of possession.

Which of the following forms of co-ownership is characterized by equal interests and the right of survivorship?

A.Joint tenancy

B.Tenancy in common

C.Severalty

D.Life estate

A.Joint tenancy

B.Tenancy in common

C.Severalty

D.Life estate

Joint tenancy includes the right of survivorship and requires unity of interest (each joint tenant must have an equal interest in the property).

In which of the following ways can a joint tenancy be created?

A.By a husband deeding property to himself and his wife as joint tenants

B.By joint tenants deeding property to themselves and others as joint tenants

C.By tenants in common deeding property to themselves as joint tenants

D.All of the above

A.By a husband deeding property to himself and his wife as joint tenants

B.By joint tenants deeding property to themselves and others as joint tenants

C.By tenants in common deeding property to themselves as joint tenants

D.All of the above

A joint tenancy can be created in any of these ways, as long as the "four unities" requirement is fulfilled. All of the joint tenants must take title at the same time (unity of time) and through the same deed (unity of title), and they must have equal ownership shares (unity of interest) and equal possessory rights (unity of possession).

Joint tenancy ownership of real property requires which of the following?

A.Husband and wife relationship

B.The clause "unity of title" inserted in the deed with the names of the joint tenants

C.Equal interests in the property held by each of the joint tenants

D.All of the above

A.Husband and wife relationship

B.The clause "unity of title" inserted in the deed with the names of the joint tenants

C.Equal interests in the property held by each of the joint tenants

D.All of the above

All of the following would defeat a joint tenancy, except:

A.One joint tenant conveys her interest to a third party

B.Receiving title in separate documents

C.Each joint tenant is restricted to a certain portion of the property

D.One joint tenant executes a mortgage against his interest in the property

A.One joint tenant conveys her interest to a third party

B.Receiving title in separate documents

C.Each joint tenant is restricted to a certain portion of the property

D.One joint tenant executes a mortgage against his interest in the property

A mortgage or deed of trust executed by one joint tenant does not break the unities of time and title, so the joint tenancy continues unaffected. A mortgage or deed of trust is only an encumbrance, not a transfer of title.

Which of the following concepts is most closely related to "time, title, interest, and possession"?

A.Survivorship

B.Tenancy in common

C.Severalty

D.Partnership

A.Survivorship

B.Tenancy in common

C.Severalty

D.Partnership

Survivorship is a feature of joint tenancy, and joint tenancy requires the unities of time, title, interest, and possession.

Al willed his property to his three children (Barry, Chris, and Dara) as joint tenants. Barry then died, leaving behind a will stating that his share of the property would pass to his daughter Mary. Dara then sold her portion of the property to her friend Vera. At this point, how is the property owned?

A.Mary and Chris own it as joint tenants

B.Vera and Chris own it as tenants in common

C.Mary, Vera, and Chris own it as tenants in common

D.Mary and Chris own their shares as joint tenants, while Vera owns her share as a tenant in common

A.Mary and Chris own it as joint tenants

B.Vera and Chris own it as tenants in common

C.Mary, Vera, and Chris own it as tenants in common

D.Mary and Chris own their shares as joint tenants, while Vera owns her share as a tenant in common

When Barry died, his attempt to pass his share to Mary failed. A joint tenant may not will his interest. Therefore, Chris and Dara were left as joint tenants. When Dara sold her share of the property, that terminated the joint tenancy between Dara and Chris. Chris and Vera continue to own the property together, but as tenants in common.

Two people own a house as joint tenants. One co-tenant executes a promissory note secured by a deed of trust against her interest in the house. Which of the following statements is true?

A.This defeats one of the unities required for joint tenancy.

B.This invalidates the promissory note because the co-tenant only had a partial interest in the property.

C.This places the beneficiary in a precarious position, since the lien created by the deed of trust will be extinguished upon the death of the borrower.

D.This creates a security interest in all other properties owned by the borrower.

A.This defeats one of the unities required for joint tenancy.

B.This invalidates the promissory note because the co-tenant only had a partial interest in the property.

C.This places the beneficiary in a precarious position, since the lien created by the deed of trust will be extinguished upon the death of the borrower.

D.This creates a security interest in all other properties owned by the borrower.

A lien or other creditor's claim against one co-tenant's interest in a property held in joint tenancy will terminate upon the death of that co-tenant. A valid promissory note may be secured by a deed of trust against one person's interest in a joint tenancy, but it's unlikely that a lender would agree to that arrangement, since the lender's security interest would terminate if the borrower died.

Jim, Mitch, and Noel own a vacant lot as joint tenants. If Jim dies:

A.the joint tenancy is totally terminated

B.Mitch and Noel receive Jim's interest through intestate succession if Jim dies without a will

C.Mitch and Noel receive Jim's interest through survivorship as tenants in common

D.Jim's interest is terminated

A.the joint tenancy is totally terminated

B.Mitch and Noel receive Jim's interest through intestate succession if Jim dies without a will

C.Mitch and Noel receive Jim's interest through survivorship as tenants in common

D.Jim's interest is terminated

If a joint tenant dies, his or her interest is immediately terminated and passes automatically to the co-tenants by right of survivorship. The surviving co-tenants continue to hold title in joint tenancy.

A brother and sister owned a property as joint tenants. All of their other finances were separate. If the brother died with a large amount of debt, the creditors would:

A.place an attachment lien only on the property that was owned in joint tenancy

B.place an attachment lien on all property owned by the sister

C.ask the probate court to order the property sold in order to satisfy the debts

D.obtain no satisfaction, since the property was transferred to the sister without being encumbered by the brother's debts

A.place an attachment lien only on the property that was owned in joint tenancy

B.place an attachment lien on all property owned by the sister

C.ask the probate court to order the property sold in order to satisfy the debts

D.obtain no satisfaction, since the property was transferred to the sister without being encumbered by the brother's debts

In which of the following ways are joint tenancy and community property similar?

A.Both are limited to husband and wife

B.Both require that the property be owned by no more than two parties

C.Both involve equal ownership interests

D.Both require the signature of all parties to sell any interest in the property

A.Both are limited to husband and wife

B.Both require that the property be owned by no more than two parties

C.Both involve equal ownership interests

D.Both require the signature of all parties to sell any interest in the property

Each joint tenant must have an equal undivided interest in the joint tenancy property. Similarly, each spouse has an undivided 50% interest in the couple's community property.

Cities and states usually take title to property this way.

Severalty

Incorporated entities (like cities and states, as well as corporations) take title to land in severalty.

The key distinguishing feature of this form of ownership is survivorship.

Joint Tenancy

The key feature of title held in joint tenancy is the right of survivorship.

With this form of ownership, the co-owners have undivided interests, but their interests don't have to be equal.

Which of the following is an advantage to structuring a business as a general partnership?

A.Each partner has the use of the partnership assets

B.The personal assets of a partner may not be reached by a creditor of the partnership

C.Passive investors may invest in the partnership without becoming personally liable for the partnership's debts

D.Partners may delegate management duties to the partnership's officers

A.Each partner has the use of the partnership assets

B.The personal assets of a partner may not be reached by a creditor of the partnership

C.Passive investors may invest in the partnership without becoming personally liable for the partnership's debts

D.Partners may delegate management duties to the partnership's officers

Each partner in a general partnership has the right to use and possess partnership property. Each partner has the right to share in the partnership's profits and an obligation to share in its losses.

If a business fails, its creditors may reach the personal assets of all of its principals if the business was organized as a:

A.corporation

B.general partnership

C.limited partnership

D.limited liability company

A.corporation

B.general partnership

C.limited partnership

D.limited liability company

In a general partnership, each partner is personally liable for the partnership's debts and obligations.

Which of the following statements about limited partnerships is false?

A.A limited partner is personally liable for all of the partnership's debts

B.A limited partnership needs at least one limited partner and one general partner

C.A limited partnership agreement must be in writing and conform to the state Uniform Limited Partnerships Act

D.A limited partner may not be involved in the day-to-day operation of the business

A.A limited partner is personally liable for all of the partnership's debts

B.A limited partnership needs at least one limited partner and one general partner

C.A limited partnership agreement must be in writing and conform to the state Uniform Limited Partnerships Act

D.A limited partner may not be involved in the day-to-day operation of the business

Unlike general partners, limited partners are not personally liable for the partnership's debts.

A corporation may not hold title to a property as a joint tenant because:

A.no corporation may hold title to real property

B.it is prohibited by Securities and Exchange Commission regulations

C.only a husband and wife may hold property in joint tenancy

D.a corporation has a potentially perpetual existence

A.no corporation may hold title to real property

B.it is prohibited by Securities and Exchange Commission regulations

C.only a husband and wife may hold property in joint tenancy

D.a corporation has a potentially perpetual existence

Corporations may not hold title in joint tenancy. Because a corporation has a potentially perpetual existence, the other co-owner(s) couldn't have a true right of survivorship.

A limited liability corporation:

A.is a business entity that has one general partner and multiple limited partners

B.is a hybrid business entity that combines elements of a corporation and a limited partnership

C.requires at least 100 investors and that 75% of its assets be invested in real estate

D.suffers from the problem of double taxation

A.is a business entity that has one general partner and multiple limited partners

B.is a hybrid business entity that combines elements of a corporation and a limited partnership

C.requires at least 100 investors and that 75% of its assets be invested in real estate

D.suffers from the problem of double taxation

A general partnership is characterized by:

A.limited liability and double taxation

B.limited liability and single taxation

C.unlimited liability and double taxation

D.unlimited liability and single taxation

A.limited liability and double taxation

B.limited liability and single taxation

C.unlimited liability and double taxation

D.unlimited liability and single taxation

A general partner has unlimited liability -- in other words, she can be held personally liable for the partnership's debts. A general partnership's profits are taxed only once. Each partner will owe income tax on the share of the partnership's profits that he or she receives, but the profits aren't also taxed as the income of the partnership. (By contrast, corporate profits are taxed first as corporate income, then taxed again as the personal income of shareholders.)

A group of investors wishes to form a real estate investment business that will limit their personal liability for business debts. They may form a:

A.real estate investment trust (REIT)

B.corporation

C.limited partnership

D.All of the above

A.real estate investment trust (REIT)

B.corporation

C.limited partnership

D.All of the above

REITs, corporations, and limited partnerships all have the advantage of insulating investors from personal liability for the business's debts. Limited liability companies also provide that protection.

Which of the following statements would be true concerning both a landlord-owned apartment building and a condominium project?

A.Both would constitute a subdivision if they contain five or more units

B.The occupants of both apartments and condominiums hold estates in real property

C.Separate tax assessments are made for each unit in both apartments and condominiums

D.The occupants of both apartments and condominiums have fee simple interests

A.Both would constitute a subdivision if they contain five or more units

B.The occupants of both apartments and condominiums hold estates in real property

C.Separate tax assessments are made for each unit in both apartments and condominiums

D.The occupants of both apartments and condominiums have fee simple interests

An apartment tenant has a leasehold estate, while a condominium owner has a freehold estate

An estate in real property consisting of a separate interest in a space in a residential, commercial, or industrial building, together with an undivided interest in the property's common areas, would be a:

A.stock cooperative

B.community apartment project

C.condominium

D.None of the above

A.stock cooperative

B.community apartment project

C.condominium

D.None of the above

An interest in a condominium combines a separate fee simple interest in a particular unit with an undivided interest in the project's common areas or common elements, which all of the unit owners share as tenants in common.

The seller of a condominium unit must furnish the buyer with:

A.the bylaws

B.the CC&Rs

C.the most recent financial statement of the condominium association

D.All of the above

A.the bylaws

B.the CC&Rs

C.the most recent financial statement of the condominium association

D.All of the above

Which of the following items would be considered a part of a condominium unit in a residential building, instead of a common element?

A.Bearing walls

B.Building's central heating system

C.Elevator

D.None of the above

A.Bearing walls

B.Building's central heating system

C.Elevator

D.None of the above

None of these items is considered part of a condominium unit. The unit owner's separate property includes only items that are inside the unit's boundaries. All of the listed items are part of the condominium building itself, so they are common elements, owned by all of the unit owners as tenants in common.

A sidewalk that is part of a condominium complex would usually be a:

A.minimum of 4 feet wide

B.tarmac

C.common area

D.All of the above

A.minimum of 4 feet wide

B.tarmac

C.common area

D.All of the above

Sidewalks are found outside of individual condominium units, and therefore would be considered part of the common areas, unless there was an agreement to the contrary. There is no standard width or construction material for condominium sidewalks.

In a condominium, real property tax assessments:

A.are made on each individual unit

B.are made on the entire property and then prorated by the building manager

C.do not include a share of the value of the condominium common areas

D.will create a lien on the entire property, but not on the individual unit

A.are made on each individual unit

B.are made on the entire property and then prorated by the building manager

C.do not include a share of the value of the condominium common areas

D.will create a lien on the entire property, but not on the individual unit

Which of the following statements about condominiums is false?

A.A condominium owner has an estate in real property

B.A condominium owner has an undivided interest in real property plus a separate interest in a unit within that real property

C.A condominium owner has an estate for years

D.A condominium may be commercial or industrial

A.A condominium owner has an estate in real property

B.A condominium owner has an undivided interest in real property plus a separate interest in a unit within that real property

C.A condominium owner has an estate for years

D.A condominium may be commercial or industrial

A condominium owner owns a freehold interest, not a leasehold interest such as an estate for years.

Sam has a proprietary lease on an apartment in a cooperative project. He makes monthly payments that include his proportionate share of principal, interest, taxes, insurance, and association fees. In this situation, which of the following is true?

A.Sam cannot deduct interest and property taxes on his income tax return

B.Any special assessments will be imposed on all the residents of the building, not on the cooperative corporation

C.Sam will receive a separate property tax assessment for his unit

D.If any other residents default on their monthly payments, Sam could lose equity on his investment

A.Sam cannot deduct interest and property taxes on his income tax return

B.Any special assessments will be imposed on all the residents of the building, not on the cooperative corporation

C.Sam will receive a separate property tax assessment for his unit

D.If any other residents default on their monthly payments, Sam could lose equity on his investment

Because a cooperative project is financed with a single mortgage and taxed as a single property, the failure of one tenant to pay his share of the cooperative's debt service, taxes, and other expenses can harm all the tenants -- particularly if it leads to a foreclosure.