Real Estate Test
Which statement is TRUE regarding a life estate?
Life estates are frequently created by will—the husband leaves the home to his wife for life and then to their children. There could be several “life tenants, or the survivor of them.” The owner of the fee (grantor of life estate) is responsible for any mortgage prin- cipal payments, but the life tenant is responsible for carrying charges, such as interest, taxes, and maintenance.
A farmer sold a portion of his farm to a railroad company with the condition “as long as it remains a rail line.” In the event of abandonment, the rail line property would revert back to the farmer or the farmer’s heirs. What type of estate is described in this scenario?
This is an example of a fee simple determinable estate. The farmer sold a portion of his farm to the railroad company with the condition, as long as it remains a rail line. In the event of abandonment, the rail line property would revert back to the farmer or the farmer’s heirs.
A hospital receives a gift of real property from an elderly couple who reserve to them- selves a life estate. The hospital is the
After the death of both spouses, the life estate will end and ownership will remain away from the grantor’s estate. The hospital’s remainder interest then will ripen into a fee simple absolute estate. Here is another way to remember what a remainder estate is—it is the estate that remains after the existing life estate terminates.
An estate in land vested in a grantee “until she marries” is properly classifiable as
This is a freehold estate in fee simple, which can be terminated upon the hap- pening of an event such as marriage. It also is called a determinable fee or qualified fee.
Fee simple is all of the following EXCEPT
One of the key features of a fee simple is that the property can continue in the same family line through inheritance. The two most popular forms of free- hold estates are fee simple (including absolute and conditional fees) and life estates.
The degree, quantity, or nature of a person’s interest in real property is called his
This is the classic definition of estate (Latin for “status”). It ranges from absolute ownership to mere possession.
When a deed does not specify the estate being conveyed, it is presumed to transfer
While a defeasible fee (one subject to a condition) and a life estate can be transferred by deed, they must be clearly specified. An estate for years is transferred (demised) by lease. A fee simple absolute is one that is not qualified (or conditional).
The holder of which of the following would be a “nonfreeholder?”
An estate for years is the only “less- than-freehold” estate listed here. An unrecorded vendor’s (seller) deed would transfer a freehold estate, provided the grantor owned one and there was valid delivery (recording is advised but not required).
The return of land to the grantor or grant- or’s heirs when the grant is over is BEST described as
A reversion occurs when the land returns to the grantor or heirs of the grantor. A remainder occurs when the land remains away from the grantor or heirs
4. In a deed that states “to Jonathon for his life,” the grantor has what type of interest?
When Jonathon dies, his life estate ends, and the property will revert back to the grantor. Rights of reentry are found in leases and also in a fee simple subject to a condition subsequent in which the condition is broken or violated.
Which of these activities can the owner of a life estate NOT do?
A devise is a transfer by will (do not confuse with demise, which is a transfer by lease), but there is no estate left for heirs after the owner of the life estate (life tenant) dies. Because the buyer, lender, and lessee take their interest with knowledge, subject to the life estate, their interests cease when the life estate ceases. Lenders rarely lend on a life estate; if they do, they may require a term life insurance policy or an agreement with the remainderman as further security. Incidentally, any buyer of a life estate would then own a “life estate pur autre vie.”
If Alycia deeds property to Bernice and her heirs, with the stipulation that if Bernice leaves no heirs the property will then go to Cynthia, then Cynthia now holds which type of estate?
A reversionary interest under choice (D) is when the property will return to the grantor od the grantor's heirs. Here, the property "remain" away from the grantor and Cynthia will be the fee owner provided that (contingent upon) Bernice dies leaving no heirs. Remainders are either vested (owned now) or contingent.
Which statement provides the greatest assurance that you are getting fee simple ownership?
Under (A) and (B) you would have a claim for money damages if it turned out the grantor did not have the title as promised. There is more assurance of recovering money from the title com- pany than from a grantor. For example, perhaps some defect in the title, owing to some off-record risk (such as forg- ery in the chain of title), prevents clear ownership of title. Title insurance companies only insure the title subject to stated exceptions; they cannot correct the actual defects that may be found in the title. Also, under (C), a deed could be used to transfer a life estate, which is not fee simple ownership.
The largest estate or ownership in real property is
The largest bundle of rights attaches to a fee simple estate
An example of a less-than-freehold estate is
Leaseholds are less than freehold based on ancient feudal classifications in which only “freemen” had protection of the courts and the serfs had no interest in land, although they had possession under leases.
A widow who is willed the use of the family home for the rest of her natural life, with provision that title shall pass to the children upon her death, holds
During her life, she has ownership of a life estate. Her children have a remain- der interest. Despite having ownership rights in the property, the widow can’t commit “waste,” such as tearing the structure down or converting it into a triplex rental.
Which of these characteristics does NOT describe a fee simple estate?
It is indefinite in time; unless conveyed to another, it will come to an end only in the event the owner dies without hav- ing left heirs or a valid will (in which case escheat occurs).
A man dies without leaving a valid will. He is said to have died
When a person dies without leaving a valid will, he is said to have died intestate.
Possession, control, and enjoyment are included in
Possession, control, enjoyment, exclusion, and disposition are the bundle of legal rights that come with ownership of real property.
A freehold could be any of the following EXCEPT
An estate for years is a leasehold. Next to the fee simple absolute and the defeasible fee, the life estate is the most common freehold estate today. While it is not an estate of inheritance, it is an estate for an indefinite, or unpredict- able, duration.
A life estate may be granted
The measuring life for a life estate can be that of someone other than the grantee—Abe to Ben for the life of Carl. Thus, upon Carl’s death, the property will revert back to Abe. If Ben predeceases Carl, Ben’s heirs will have an interest in the property until Carl dies. This is called an estate pur autre vie.
A woman possesses a fee simple estate. Which of the follow can she NOT do to the property?
All but (C) are within the “bundle of rights.” The woman has a fee simple estate. She may not violate the govern- mental limitations.
With respect to real property, the term estate is BEST described as
(A) and (B) could include personal property, and (C) is just one example of an estate.
Which of the following can the grantor of a life estate NOT do?
Grantors should grant title using the same name in which they acquired title. If they don’t, this may cause title search problems. However, all that is required for a valid transfer is delivery, and that involves the intention of the grantor to relinquish all control to the grantee. Under choice (B) the grantor can struc- ture the transfer so he or she keeps a reversionary interest. A life estate can be for the life of more than one person.
Who usually selects the administrator of an estate?
The probate court assigns an administrator to administer the estate of those who die intestate.