Arkansas Real Estate License Property Ownership and Transfer Questions and Answers — Questions and Answers
Question 1: A married couple in Arkansas purchases a home together and the deed does not specify the form of ownership. By default, how will the title be held?
- As tenants in common
- As joint tenants with right of survivorship
- As tenancy by the entirety (Correct answer)
- In severalty
Correct answer: As tenancy by the entirety
In Arkansas, any conveyance of real property to a husband and wife is presumed to create a tenancy by the entirety unless the deed expressly states otherwise. This form of ownership is unique to married couples and includes the right of survivorship.
Question 2: An individual wants to transfer ownership of their Arkansas property to a relative upon their death, but wishes to avoid the probate process. Which of the following legal instruments would be most appropriate for this purpose?
- A quitclaim deed executed after death
- A standard will
- A Beneficiary Deed (or Transfer on Death Deed) (Correct answer)
- A life estate created in their will
Correct answer: A Beneficiary Deed (or Transfer on Death Deed)
An Arkansas Beneficiary Deed, also known as a Transfer on Death (TOD) Deed, allows the owner to designate a beneficiary who will automatically inherit the real estate upon the owner's death, bypassing the need for probate court proceedings. The deed must be signed, notarized, and recorded before the owner's death to be valid.
Question 3: Under Arkansas law, which of the following is a key requirement for a successful claim of adverse possession, in addition to the common law requirements of open, notorious, hostile, exclusive, and continuous possession?
- Possession for a period of 20 years
- Making significant improvements to the property valued at over $5,000
- Having color of title and paying ad valorem taxes for seven years (Correct answer)
- Notifying the true owner of the intent to possess the property via certified mail
Correct answer: Having color of title and paying ad valorem taxes for seven years
Arkansas statutes have added requirements to the common law elements of adverse possession. A claimant must now have "color of title" (a document that appears to give title) and must have paid the property (ad valorem) taxes for seven consecutive years.
Question 4: A person dies intestate (without a will) in Arkansas, leaving behind a spouse but no children. The property owned was a new acquisition (not an ancestral estate). What interest does the surviving spouse have in the deceased's real estate as against collateral heirs?
- A life estate in one-third of the property
- A fee simple ownership of one-half of the real estate (Correct answer)
- A fee simple ownership of the entire property
- A life estate in one-half of the property
Correct answer: A fee simple ownership of one-half of the real estate
According to Arkansas Code § 28-11-307, if a person dies leaving a spouse and no children, the surviving spouse is entitled to a fee simple interest in one-half (1/2) of the real estate if it was a new acquisition, as against collateral heirs.
Question 5: Which of the following is true regarding homestead rights in Arkansas for a family's primary residence located within a city?
- The homestead is protected from all creditors without exception.
- The protection is limited to $100,000 in equity.
- The homestead can be up to one-quarter (1/4) of an acre, regardless of its value. (Correct answer)
- Homestead rights do not apply to properties within incorporated city limits.
Correct answer: The homestead can be up to one-quarter (1/4) of an acre, regardless of its value.
The Arkansas Constitution provides for homestead exemptions. For an urban homestead (within a city, town, or village), the exemption consists of up to one acre of land, with a value limit of $2,500. However, the constitution also states that in no event shall the homestead be reduced to less than one-quarter (1/4) of an acre of land, without regard to value.
Question 6: A lender in Arkansas is foreclosing on a property using the non-judicial foreclosure process. What is a key requirement regarding the sale of the property?
- The property must be sold at a public auction to the highest bidder, regardless of the price.
- The sale must be approved by a court before it can be finalized.
- The property must sell for at least two-thirds of its appraised value. (Correct answer)
- The homeowner has a statutory right of redemption for one year after the sale.
Correct answer: The property must sell for at least two-thirds of its appraised value.
In an Arkansas foreclosure, whether judicial or non-judicial, the property must be appraised before the sale. The law mandates that the property cannot be sold for less than two-thirds (2/3) of the appraised value. The right of redemption only applies to judicial foreclosures, not non-judicial ones.
Arkansas Real Estate License Property Ownership and Transfer Questions and Answers
A married couple in Arkansas purchases a home together and the deed does not specify the form of ownership.
By default, how will the title be held?