Real Estate Salesperson Licensing Exam Property Ownership, Land Characteristics, and Interests in Real Estate Syllabus

How many acres are in the SW 1/4 of the NE 1/4 of a section?

20 acres. 640 acres x 1/4 x 1/4 = 640 / 16 = 40... correction: multiply the fractions: 1/4 x 1/4 = 1/16; 640 / 16 = 40 acres.

What is the lot-and-block (recorded plat) system used for?

It describes lots in subdivisions by referencing a recorded subdivision plat map, citing the lot number, block number, subdivision name, and the county/recording data.

What is an estate in land?

An estate is the degree, quantity, nature, and extent of a person's ownership interest in real property, classified as either freehold (ownership) or leasehold (possession).

What distinguishes a freehold estate from a leasehold estate?

A freehold estate is ownership of indeterminate (unknown) duration; a leasehold estate is a right of possession for a fixed or determinable period, with title remaining in the owner.

What is a fee simple absolute estate?

Fee simple absolute is the highest, most complete form of ownership - it is of indefinite duration, freely transferable, and inheritable, with no conditions on use beyond government powers.

What is a fee simple defeasible estate?

A defeasible fee is ownership subject to a condition or limitation; if the condition is violated, ownership can be lost or revert. Types include fee simple determinable and fee simple subject to a condition subsequent.

What is a life estate?

A life estate is a freehold estate limited in duration to the life of the holder or another named person (life tenant). It is not inheritable; on death the property passes to a remainderman or reverts to the grantor.

What is the difference between a remainder and a reversion in a life estate?

A remainder passes the estate to a named third party (remainderman) when the life estate ends; a reversion returns the estate to the original grantor or their heirs.

What is a pur autre vie life estate?

A life estate pur autre vie is measured by the life of a person other than the life tenant - it ends when that designated third party dies.

Name the four types of leasehold (less-than-freehold) estates.

Estate for years (fixed term), estate from period to period (periodic tenancy), estate at will (tenancy at will), and estate at sufferance (tenancy at sufferance).

What is an estate (tenancy) for years?

A leasehold with a definite beginning and ending date; it expires automatically at the end of the term with no notice required, regardless of length.

What is a periodic tenancy (estate from period to period)?

A lease that automatically renews for successive periods (e.g., month-to-month) until proper notice to terminate is given by either party.

What is the difference between a tenancy at will and a tenancy at sufferance?

Tenancy at will: possession with the owner's consent for an indefinite period, terminable by either party with notice. Tenancy at sufferance: a tenant holds over without consent after a lawful lease ends - the lowest estate, with no notice owed by the owner.

What four government powers limit private ownership (acronym PETE)?

Police power, Eminent domain, Taxation, and Escheat.

What is police power?

The government's authority to enact laws and regulations to protect public health, safety, and welfare - e.g., zoning, building codes, and environmental regulations - without compensation to owners.

What is eminent domain, and what is condemnation?

Eminent domain is the government's power to take private property for public use upon paying just compensation; condemnation is the legal process used to exercise that power.

What is escheat?

Escheat is the reversion of property to the state when an owner dies leaving no heirs, no will, and no other lawful claimants.

What is ownership in severalty?

Ownership in severalty is title held by one individual or entity alone - sole ownership, 'severed' from all other owners.

Name the main forms of concurrent (co-)ownership.

Tenancy in common, joint tenancy, tenancy by the entirety, and (in some states) community property.

What are the key features of tenancy in common?

Two or more owners hold undivided interests (which may be unequal) with no right of survivorship; each owner's share passes to their heirs/devisees on death and can be sold independently.

What four unities are required to create a joint tenancy (PITT)?

Possession, Interest, Time, and Title - co-owners must take equal interests, at the same time, by the same instrument, with equal right of possession.

What is the defining feature of joint tenancy?

The right of survivorship - when a joint tenant dies, their interest passes automatically to the surviving joint tenants, not to heirs, bypassing probate.

What is tenancy by the entirety?

A form of co-ownership available only to married couples, treating them as a single legal unit with right of survivorship; neither spouse can convey their interest separately without the other's consent.

What is community property?

In community-property states, most property acquired by either spouse during marriage is owned equally (50/50) by both, while property owned before marriage or received by gift/inheritance is separate property.

What is a partition action?

A partition is a legal action by which co-owners (tenants in common or joint tenants) divide jointly owned property or force its sale to terminate the co-ownership.

How does ownership by a general partnership differ from a limited partnership?

In a general partnership all partners share management and unlimited personal liability; in a limited partnership, general partners manage and bear full liability while limited partners are passive investors liable only up to their investment.

How does a corporation hold title, and what is a key tax drawback?

A corporation is a legal entity that holds title in severalty in its own name (perpetual existence, limited owner liability); its drawback is double taxation - profits are taxed to the corporation and again to shareholders as dividends.

What is a land trust, and who are the parties to a trust?

A land trust holds real estate title for a beneficiary, often keeping ownership private. The parties are the trustor/grantor (creator), the trustee (holds/manages title), and the beneficiary (receives the benefits).

In a condominium, what does an owner hold, and how are common areas owned?

A condo owner holds fee simple title to their individual unit plus an undivided tenancy-in-common interest in the common areas shared with all other unit owners.

How does a cooperative (co-op) differ from a condominium?

In a cooperative, a corporation owns the entire building; residents buy shares of stock and receive a proprietary lease to their unit, so they own personal property (stock) rather than real estate.

What is a timeshare?

A timeshare is a form of shared ownership giving the holder the right to use/occupy a property for a specified interval each year, either as a fee (deeded) interest or a right-to-use (leasehold) interest.

What is an encumbrance?

An encumbrance is any claim, charge, lien, or right held by a non-owner that affects or limits the title or use of real property, such as easements, liens, deed restrictions, and encroachments.

What is an easement?

An easement is a non-possessory right to use another person's land for a specific purpose (e.g., a right of way); it runs with the land and does not grant possession or ownership.

What is the difference between an easement appurtenant and an easement in gross?

An easement appurtenant benefits an adjoining parcel and involves two tracts (dominant and servient tenements), transferring with the land. An easement in gross benefits a person or entity (e.g., a utility company) with no dominant tenement.

In an easement appurtenant, what are the dominant and servient tenements?

The dominant tenement is the parcel that benefits from / uses the easement; the servient tenement is the parcel that is burdened by / grants the easement.

What is an easement by prescription?

An easement acquired by open, notorious, continuous, hostile, and adverse use of another's land for the statutory period, without the owner's permission.

What is an easement by necessity?

An easement created by a court (or by law) when a parcel is landlocked, giving the owner a right of ingress and egress across an adjoining parcel because there is no other access to a public road.

What is a license in real estate, and how does it differ from an easement?

A license is a revocable, personal permission to use another's land for a specific purpose; unlike an easement, it is not an interest in land, does not run with the land, and can be revoked at any time by the owner.

What is an encroachment?

An encroachment is an unauthorized physical intrusion of an improvement (building, fence, driveway) onto an adjoining owner's land; it is an encumbrance often revealed by a survey and may affect marketability.

What are deed restrictions / restrictive covenants (CC&Rs)?

Private limitations placed on land use by a deed or by a subdivision's recorded covenants, conditions & restrictions (CC&Rs); they bind present and future owners and are enforced by other affected owners, typically through injunction.

If a deed restriction and a zoning ordinance conflict, which controls?

The more restrictive of the two controls - the owner must comply with whichever (private deed restriction or public zoning law) imposes the stricter limitation.

What is a lien?

A lien is a financial encumbrance - a charge or claim against property used as security for a debt or obligation - that gives the creditor the right to have the debt satisfied from the property, often by forced sale.

What is the difference between a voluntary lien and an involuntary lien?

A voluntary lien is created intentionally by the owner's action (e.g., a mortgage); an involuntary lien is created by law without the owner's consent (e.g., tax liens, mechanic's liens, judgment liens).

What is the difference between a general lien and a specific lien?

A general lien attaches to all of a debtor's property, real and personal (e.g., judgment liens, IRS/estate tax liens); a specific lien attaches only to one identified property (e.g., mortgage, mechanic's lien, property tax lien).

What is a mechanic's lien?

A specific, involuntary, statutory lien placed against real property by contractors, laborers, or suppliers who provided labor or materials to improve the property and were not paid.

Which lien generally takes priority over all others regardless of recording date?

Real estate (ad valorem) property tax liens and special assessment liens take priority over all other liens, regardless of when other liens were recorded.