Questions and Answers
An example of a freehold inheritable estate is a/an:
A real estate agent lists Harold's home, which he owns as a life estate. Harold's children hold the remainder interest. Which of the following is true?
A life estate will last until:
Jack receives a life estate in a property, for the life of Larry. When Larry dies, the property passes to Mary, rather than to the grantor or the grantor's heirs. This is a:
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Ben receives a life estate in a property, with his nephew Will designated as the remainderman. When Ben dies, what kind of interest does Will receive?
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Maria has a lease that begins on June 1 and ends on December 1 of that same year. Maria has a:
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A three-year lease ends. The tenant is allowed by the landlord to stay on and to continue to pay rent, on a month-to-month basis. This would be a/an:
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A corporation takes title to real property through a/an:
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A primary advantage of owning a property in severalty is:
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A limited partnership is a preferable method of owning real estate investment properties because:
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Mark and Kim's two-year lease on their apartment expires. Unhappy that the couple doesn't plan to renew the lease, the property manager charges them one month's rent for failure to give notice. If the lease is silent regarding this issue, in this case:
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Two cousins want to buy a house together and arrange it so that if one dies, the other will receive full ownership of the property. They will probably take title to the property as:
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Erin entered into a lease that begins February 1, and is to end on January 31 three years later. This leasehold is a/an:
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Jill and Julie are joint tenants. Jill sells her interest in the property to Sam. Julie and Sam:
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A tenancy in which the tenant is in possession with the permission of the landlord, but there is no definite rental period or duration of possession, is called a/an:
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Property held in tenancy by the entirety:
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A store owner would like to sell common stock in her business (a chain of stores) to investors. She asks an inexperienced licensee for help. The licensee should:
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A popular downtown condominium project has many common facilities, such as a swimming pool, tennis courts, a gym, and a spa. These common elements are likely to be owned by:
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An investor would like to invest in real estate, but without being involved in management or subjecting himself to any personal liability. He should invest in a:
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A broker would need to have a securities license to participate in:
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Study Notes
Estates in Land
- A fee simple defeasible estate is inheritable and has the highest form of ownership with potentially infinite duration.
- Life estates are generally not inheritable; the property is transferred to the remaindermen after the life tenant's death.
Life Estates
- When a life estate exists, anyone who purchases it only receives the interest held by the life tenant, not a fee simple absolute interest.
- A life estate lasts until the death of the measuring life, typically the life tenant.
Remainder Interests
- A life estate pur autre vie refers to a life estate measured by the life of someone other than the life tenant, with the property passing to a designated third party upon death.
- Upon the death of a life tenant, the remainderman receives a fee simple estate, signifying full ownership.
Leasehold Estates
- A term tenancy has a fixed duration, even if it's less than one year.
- A periodic tenancy continues on a month-to-month basis after a lease ends, without a fixed termination date.
Ownership Structures
- A corporation holds title to real property in severalty, ensuring clear ownership as it cannot enter joint tenancy.
- Joint tenancy includes the right of survivorship, allowing a remaining tenant to inherit full ownership if one tenant passes away.
Legal Concepts
- A limited partnership allows individuals to invest with limited liability and without managerial responsibilities, making it advantageous for real estate investment.
- An estate at will exists when a tenant possesses property with the landlord's permission but without a fixed rental period.
Leasing and Tenancy
- No notice is needed for tenants with an estate for years unless a renewal agreement is made, thus preventing additional penalties.
- Tenancy by the entirety is exclusive to married couples, reflecting shared ownership without the ability to transfer interests separately.
Securities and Investments
- Real estate licensees should refer clients looking to sell stocks to a licensed securities dealer, as real estate licenses do not cover securities transactions.
- Common facilities in condominiums are owned by unit owners as an undivided percentage interest.
Personal Liability in Investments
- Investors wishing to avoid personal liability should choose a limited partnership, which provides liability protection but limits management involvement.
- A broker requires a securities license for transactions involving investment contracts, independent of real property sales.
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Description
Test your knowledge on estates in land and methods of holding title with these flashcards from Chapter 2 of the Insider's Guide to Passing the Washington Real Estate Exam. Understand the key concepts and definitions to help you succeed on the exam.
