Perry Real Estate College Final Exam
ACTUAL EXAM 2026/2027 | Real
Estate Licensing | Verified Q&A | Pass
Guaranteed - A+ Graded
SECTION 1: PROPERTY OWNERSHIP & LAND USE CONTROLS (12 Questions)
Q1: A property owner holds a life estate in a house. Upon the owner's death, the property will pass to
the owner's adult child, who holds the remainder interest. During the life tenant's lifetime, which
statement is correct regarding the adult child's rights?
A. The adult child can sell their interest to a third party without the life tenant's permission [CORRECT]
B. The adult child can take possession of the property at any time
C. The adult child has no legal interest until the life tenant dies
D. The adult child must pay property taxes to maintain their interest
Rationale: A remainder interest is a present, vested property right that can be sold, mortgaged, or
transferred during the life tenant's lifetime. The remainderman holds a future interest that is legally
recognized now, though possession only occurs upon the life tenant's death. The life tenant, not the
remainderman, is responsible for property taxes, insurance, and maintenance during their lifetime.
Q2: Which of the following represents the highest and most complete form of property ownership,
including the right to pass property to heirs?
A. Life estate
B. Fee simple absolute [CORRECT]
C. Leasehold estate
D. Fee simple determinable
Rationale: Fee simple absolute represents the maximum possible estate in land, with no limitations on
inheritance rights, duration, or conditions. It includes the complete bundle of rights: possession, control,
exclusion, enjoyment, and disposition. Life estates terminate upon death, leaseholds are temporary, and
fee simple determinable contains conditions that can terminate the estate.
,Q3: A homeowner discovers that a utility company has the right to install and maintain power lines
across the back of their property. This right is best described as:
A. An easement in gross [CORRECT]
B. A license
C. A profit
D. A covenant
Rationale: An easement in gross benefits a specific entity (the utility company) rather than adjoining
land. Utility easements are classic examples—they grant the right to use another's land for a specific
purpose without requiring dominant tenement property. Licenses are revocable permissions, profits
involve removing resources, and covenants are promises concerning land use.
Q4: A city council votes to rezone a residential neighborhood to commercial use to accommodate a new
shopping center. A homeowner in the area argues this reduces their property value. Which statement is
correct?
A. The homeowner is entitled to compensation for any decrease in property value
B. The city must prove the homeowner's property is blighted before rezoning
C. Zoning is a valid exercise of police power and does not require compensation [CORRECT]
D. The homeowner can veto the rezoning if they prove economic harm
Rationale: Zoning represents a legitimate exercise of government's police power to protect public
health, safety, and welfare. Unlike eminent domain, which requires just compensation for taking
property, rezoning under police power does not trigger compensation requirements unless it constitutes
a regulatory taking that deprives all economically viable use. Courts generally defer to legislative zoning
decisions.
Q5: A buyer purchases a property and later discovers an unpaid contractor's lien filed by a roofer who
worked for the previous owner six months prior to the sale. The lien was properly recorded. What is the
buyer's most likely legal position?
A. The buyer takes the property free of the lien because they were not a party to the roofing contract
B. The lien is invalid because the contractor failed to foreclose within the statutory period
C. The buyer is subject to the lien if it was properly recorded before the deed was recorded [CORRECT]
D. The previous owner remains solely liable and the buyer has no legal exposure
Rationale: Recorded liens run with the land and bind subsequent purchasers who take title with notice,
whether actual or constructive. A buyer's title search should reveal properly recorded encumbrances.
,The buyer may have recourse against the seller for breach of warranty deed covenants, but the lien
itself remains enforceable against the property until satisfied or extinguished through statutory
procedures.
Q6: A developer owns 500 acres and wants to ensure that all future lots in the subdivision maintain
minimum architectural standards. Which land use control mechanism would be most appropriate and
binding on subsequent owners?
A. Zoning ordinance
B. Deed restriction (restrictive covenant) [CORRECT]
C. Building permit condition
D. Private easement
Rationale: Private deed restrictions or covenants running with the land create binding obligations
enforceable by homeowners associations or other lot owners in the subdivision. Unlike zoning (public
regulation), covenants are private agreements that "run with the land" and bind all subsequent
purchasers. Courts enforce these as long as they are reasonable, clearly stated, and touch and concern
the land.
Q7: A property owner grants a neighbor the right to drive across their land to access a public road. The
neighbor's property would be landlocked without this right. This arrangement creates:
A. An easement by necessity
B. An easement by prescription
C. An easement by prior existing use (quasi-easement)
D. An easement appurtenant [CORRECT]
Rationale: An easement appurtenant benefits a specific parcel of land (the dominant tenement) and
burdens another parcel (the servient tenement). It transfers automatically with the dominant tenement
when sold. The scenario describes a classic access easement appurtenant, where the neighbor's land
benefits from passage over the owner's land. Easement by necessity requires strict common ownership
and severance creating landlocked status.
Q8: The government files a condemnation action to acquire private property for a new highway
interchange. The property owner disputes the government's right to take the property. Which legal
principle governs this situation?
A. Zoning variance
B. Eminent domain [CORRECT]
, C. Escheat
D. Adverse possession
Rationale: Eminent domain is the government's constitutional power to take private property for public
use, provided just compensation is paid. The Fifth Amendment's Takings Clause requires compensation,
while the Kelo v. City of New London decision expanded "public use" to include public benefit. The
owner cannot prevent the taking but can challenge whether the use is truly public or whether the
compensation offered represents fair market value.
Q9: A tenant farmer has been renting agricultural land for 15 years. The owner sells the property to a
developer, who immediately demands the tenant vacate. The tenant claims a right to continue farming.
Which estate interest, if any, might the tenant assert?
A. Fee simple absolute
B. Tenancy at will
C. Periodic tenancy
D. Tenancy for years with renewal rights [CORRECT]
Rationale: Agricultural leases often create tenancies for years with specific renewal or extension rights,
particularly under state farm tenancy statutes. Many jurisdictions protect tenant farmers through
required notice periods, right of first refusal, or statutory continuation rights. The specific lease terms
and applicable state agricultural tenancy laws would determine whether the tenant can maintain
possession against the new owner.
Q10: A homeowner association (HOA) rule prohibits parking commercial vehicles in driveways. A
resident who operates a plumbing business from home challenges the rule. Which statement accurately
describes the legal relationship?
A. The resident can ignore the rule because it interferes with their livelihood
B. The HOA rule is unenforceable without city council approval
C. The deed restrictions create binding obligations agreed to at purchase [CORRECT]
D. The resident is exempt if they owned the property before the HOA was formed
Rationale: Covenants, conditions, and restrictions (CC&Rs) recorded in the deed create enforceable
contractual obligations that run with the land. Buyers agree to these restrictions when purchasing
property within the subdivision. Courts generally uphold reasonable HOA rules that maintain property
values and community standards, even when they restrict commercial activities, provided the
restrictions were properly disclosed and are uniformly enforced.
Q11: Which of the following is NOT considered a physical characteristic of land?
ACTUAL EXAM 2026/2027 | Real
Estate Licensing | Verified Q&A | Pass
Guaranteed - A+ Graded
SECTION 1: PROPERTY OWNERSHIP & LAND USE CONTROLS (12 Questions)
Q1: A property owner holds a life estate in a house. Upon the owner's death, the property will pass to
the owner's adult child, who holds the remainder interest. During the life tenant's lifetime, which
statement is correct regarding the adult child's rights?
A. The adult child can sell their interest to a third party without the life tenant's permission [CORRECT]
B. The adult child can take possession of the property at any time
C. The adult child has no legal interest until the life tenant dies
D. The adult child must pay property taxes to maintain their interest
Rationale: A remainder interest is a present, vested property right that can be sold, mortgaged, or
transferred during the life tenant's lifetime. The remainderman holds a future interest that is legally
recognized now, though possession only occurs upon the life tenant's death. The life tenant, not the
remainderman, is responsible for property taxes, insurance, and maintenance during their lifetime.
Q2: Which of the following represents the highest and most complete form of property ownership,
including the right to pass property to heirs?
A. Life estate
B. Fee simple absolute [CORRECT]
C. Leasehold estate
D. Fee simple determinable
Rationale: Fee simple absolute represents the maximum possible estate in land, with no limitations on
inheritance rights, duration, or conditions. It includes the complete bundle of rights: possession, control,
exclusion, enjoyment, and disposition. Life estates terminate upon death, leaseholds are temporary, and
fee simple determinable contains conditions that can terminate the estate.
,Q3: A homeowner discovers that a utility company has the right to install and maintain power lines
across the back of their property. This right is best described as:
A. An easement in gross [CORRECT]
B. A license
C. A profit
D. A covenant
Rationale: An easement in gross benefits a specific entity (the utility company) rather than adjoining
land. Utility easements are classic examples—they grant the right to use another's land for a specific
purpose without requiring dominant tenement property. Licenses are revocable permissions, profits
involve removing resources, and covenants are promises concerning land use.
Q4: A city council votes to rezone a residential neighborhood to commercial use to accommodate a new
shopping center. A homeowner in the area argues this reduces their property value. Which statement is
correct?
A. The homeowner is entitled to compensation for any decrease in property value
B. The city must prove the homeowner's property is blighted before rezoning
C. Zoning is a valid exercise of police power and does not require compensation [CORRECT]
D. The homeowner can veto the rezoning if they prove economic harm
Rationale: Zoning represents a legitimate exercise of government's police power to protect public
health, safety, and welfare. Unlike eminent domain, which requires just compensation for taking
property, rezoning under police power does not trigger compensation requirements unless it constitutes
a regulatory taking that deprives all economically viable use. Courts generally defer to legislative zoning
decisions.
Q5: A buyer purchases a property and later discovers an unpaid contractor's lien filed by a roofer who
worked for the previous owner six months prior to the sale. The lien was properly recorded. What is the
buyer's most likely legal position?
A. The buyer takes the property free of the lien because they were not a party to the roofing contract
B. The lien is invalid because the contractor failed to foreclose within the statutory period
C. The buyer is subject to the lien if it was properly recorded before the deed was recorded [CORRECT]
D. The previous owner remains solely liable and the buyer has no legal exposure
Rationale: Recorded liens run with the land and bind subsequent purchasers who take title with notice,
whether actual or constructive. A buyer's title search should reveal properly recorded encumbrances.
,The buyer may have recourse against the seller for breach of warranty deed covenants, but the lien
itself remains enforceable against the property until satisfied or extinguished through statutory
procedures.
Q6: A developer owns 500 acres and wants to ensure that all future lots in the subdivision maintain
minimum architectural standards. Which land use control mechanism would be most appropriate and
binding on subsequent owners?
A. Zoning ordinance
B. Deed restriction (restrictive covenant) [CORRECT]
C. Building permit condition
D. Private easement
Rationale: Private deed restrictions or covenants running with the land create binding obligations
enforceable by homeowners associations or other lot owners in the subdivision. Unlike zoning (public
regulation), covenants are private agreements that "run with the land" and bind all subsequent
purchasers. Courts enforce these as long as they are reasonable, clearly stated, and touch and concern
the land.
Q7: A property owner grants a neighbor the right to drive across their land to access a public road. The
neighbor's property would be landlocked without this right. This arrangement creates:
A. An easement by necessity
B. An easement by prescription
C. An easement by prior existing use (quasi-easement)
D. An easement appurtenant [CORRECT]
Rationale: An easement appurtenant benefits a specific parcel of land (the dominant tenement) and
burdens another parcel (the servient tenement). It transfers automatically with the dominant tenement
when sold. The scenario describes a classic access easement appurtenant, where the neighbor's land
benefits from passage over the owner's land. Easement by necessity requires strict common ownership
and severance creating landlocked status.
Q8: The government files a condemnation action to acquire private property for a new highway
interchange. The property owner disputes the government's right to take the property. Which legal
principle governs this situation?
A. Zoning variance
B. Eminent domain [CORRECT]
, C. Escheat
D. Adverse possession
Rationale: Eminent domain is the government's constitutional power to take private property for public
use, provided just compensation is paid. The Fifth Amendment's Takings Clause requires compensation,
while the Kelo v. City of New London decision expanded "public use" to include public benefit. The
owner cannot prevent the taking but can challenge whether the use is truly public or whether the
compensation offered represents fair market value.
Q9: A tenant farmer has been renting agricultural land for 15 years. The owner sells the property to a
developer, who immediately demands the tenant vacate. The tenant claims a right to continue farming.
Which estate interest, if any, might the tenant assert?
A. Fee simple absolute
B. Tenancy at will
C. Periodic tenancy
D. Tenancy for years with renewal rights [CORRECT]
Rationale: Agricultural leases often create tenancies for years with specific renewal or extension rights,
particularly under state farm tenancy statutes. Many jurisdictions protect tenant farmers through
required notice periods, right of first refusal, or statutory continuation rights. The specific lease terms
and applicable state agricultural tenancy laws would determine whether the tenant can maintain
possession against the new owner.
Q10: A homeowner association (HOA) rule prohibits parking commercial vehicles in driveways. A
resident who operates a plumbing business from home challenges the rule. Which statement accurately
describes the legal relationship?
A. The resident can ignore the rule because it interferes with their livelihood
B. The HOA rule is unenforceable without city council approval
C. The deed restrictions create binding obligations agreed to at purchase [CORRECT]
D. The resident is exempt if they owned the property before the HOA was formed
Rationale: Covenants, conditions, and restrictions (CC&Rs) recorded in the deed create enforceable
contractual obligations that run with the land. Buyers agree to these restrictions when purchasing
property within the subdivision. Courts generally uphold reasonable HOA rules that maintain property
values and community standards, even when they restrict commercial activities, provided the
restrictions were properly disclosed and are uniformly enforced.
Q11: Which of the following is NOT considered a physical characteristic of land?
