Page 1 of 177
PSI NATIONAL REAL ESTATE EXAM
2026/2027
COMPREHENSIVE PRACTICE QUESTION
BANK
250+ VERIFIED QUESTIONS WITH
DETAILED RATIONALES
## SECTION I: PROPERTY OWNERSHIP
### A. Estates in Land & Freehold Estates
**Question #1**
Which of the following is considered the highest and most complete form of ownership in real
property?
A. Life estate
B. Fee simple defeasible
C. Fee simple absolute
D. Estate for years
**Correct Answer: C**
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**Rationale:** Fee simple absolute is the highest form of ownership interest in real property,
granting the owner the full bundle of rights—possession, control, enjoyment, exclusion, and
disposition—for an indefinite duration. Unlike a life estate (which lasts only for the lifetime of a
named individual) or fee simple defeasible (which can be terminated upon the occurrence of a
specified event), fee simple absolute has no conditions or limitations. An estate for years is a
leasehold estate, not a freehold estate.
---
**Question #2**
A property owner grants a neighbor the right to use a pathway across their land to access a public
road. This right is attached to the neighbor's property and will transfer automatically when the
neighbor sells the land. This is best described as:
A. An easement in gross
B. A license
C. An easement appurtenant
D. An encroachment
**Correct Answer: C**
**Rationale:** An easement appurtenant benefits a specific parcel of land (the dominant estate)
and "runs with the land," meaning it transfers automatically with the property when sold. The
neighbor's property is the dominant estate, and the pathway across the other property is the
servient estate. An easement in gross benefits a specific person or entity rather than a parcel of
land. A license is a revocable permission to use land, not a permanent property right. An
encroachment is an unauthorized physical intrusion onto another's property.
---
**Question #3**
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What type of estate exists when a person owns real property for the duration of their own
lifetime, after which the property reverts to the original grantor?
A. Fee simple absolute
B. Life estate pur autre vie
C. Ordinary life estate
D. Estate in reversion
**Correct Answer: C**
**Rationale:** An ordinary life estate grants the life tenant the right to possess and use the
property for the duration of their own life. Upon the life tenant's death, the property reverts to the
original grantor (reversion) or passes to a remainderman. A life estate pur autre vie is measured
by the life of someone other than the life tenant. Fee simple absolute has no duration limitation.
An estate in reversion is the future interest held by the grantor after granting a life estate.
---
**Question #4**
A developer purchases a parcel of land with the condition that it must be used only for residential
purposes. If the developer constructs a commercial building on the property, the ownership
interest could be terminated and revert to the original grantor. This type of ownership is called:
A. Fee simple absolute
B. Fee simple determinable
C. Fee simple condition subsequent
D. Fee simple defeasible
**Correct Answer: D (Fee simple defeasible)**
, Page 4 of 177
**Rationale:** Fee simple defeasible is a type of freehold estate that can be terminated upon the
occurrence of a specified event or condition. This category includes fee simple determinable
(automatically reverts when condition is violated) and fee simple condition subsequent (grantor
has right of entry to terminate). The scenario describes a qualified fee estate with a condition that
limits the use. Fee simple absolute has no such restrictions.
---
**Question #5**
A tenant installs a commercial refrigerator unit bolted to the floor of a leased retail space. When
the lease ends, the tenant removes the unit and repairs any damage. This refrigerator is legally
classified as:
A. A fixture that must remain with the property
B. A trade fixture that remains personal property
C. An emblement that belongs to the tenant
D. A permanent improvement that cannot be removed
**Correct Answer: B**
**Rationale:** Trade fixtures are items installed by a tenant for conducting business that remain
the personal property of the tenant, provided they are removed before the lease ends and any
damage is repaired. Unlike regular fixtures (which become part of the real property), trade
fixtures can be removed because they are essential to the tenant's business. Emblements are crops
planted by a tenant that belong to the tenant even after the lease ends.
---
**Question #6**
PSI NATIONAL REAL ESTATE EXAM
2026/2027
COMPREHENSIVE PRACTICE QUESTION
BANK
250+ VERIFIED QUESTIONS WITH
DETAILED RATIONALES
## SECTION I: PROPERTY OWNERSHIP
### A. Estates in Land & Freehold Estates
**Question #1**
Which of the following is considered the highest and most complete form of ownership in real
property?
A. Life estate
B. Fee simple defeasible
C. Fee simple absolute
D. Estate for years
**Correct Answer: C**
,Page 2 of 177
**Rationale:** Fee simple absolute is the highest form of ownership interest in real property,
granting the owner the full bundle of rights—possession, control, enjoyment, exclusion, and
disposition—for an indefinite duration. Unlike a life estate (which lasts only for the lifetime of a
named individual) or fee simple defeasible (which can be terminated upon the occurrence of a
specified event), fee simple absolute has no conditions or limitations. An estate for years is a
leasehold estate, not a freehold estate.
---
**Question #2**
A property owner grants a neighbor the right to use a pathway across their land to access a public
road. This right is attached to the neighbor's property and will transfer automatically when the
neighbor sells the land. This is best described as:
A. An easement in gross
B. A license
C. An easement appurtenant
D. An encroachment
**Correct Answer: C**
**Rationale:** An easement appurtenant benefits a specific parcel of land (the dominant estate)
and "runs with the land," meaning it transfers automatically with the property when sold. The
neighbor's property is the dominant estate, and the pathway across the other property is the
servient estate. An easement in gross benefits a specific person or entity rather than a parcel of
land. A license is a revocable permission to use land, not a permanent property right. An
encroachment is an unauthorized physical intrusion onto another's property.
---
**Question #3**
,Page 3 of 177
What type of estate exists when a person owns real property for the duration of their own
lifetime, after which the property reverts to the original grantor?
A. Fee simple absolute
B. Life estate pur autre vie
C. Ordinary life estate
D. Estate in reversion
**Correct Answer: C**
**Rationale:** An ordinary life estate grants the life tenant the right to possess and use the
property for the duration of their own life. Upon the life tenant's death, the property reverts to the
original grantor (reversion) or passes to a remainderman. A life estate pur autre vie is measured
by the life of someone other than the life tenant. Fee simple absolute has no duration limitation.
An estate in reversion is the future interest held by the grantor after granting a life estate.
---
**Question #4**
A developer purchases a parcel of land with the condition that it must be used only for residential
purposes. If the developer constructs a commercial building on the property, the ownership
interest could be terminated and revert to the original grantor. This type of ownership is called:
A. Fee simple absolute
B. Fee simple determinable
C. Fee simple condition subsequent
D. Fee simple defeasible
**Correct Answer: D (Fee simple defeasible)**
, Page 4 of 177
**Rationale:** Fee simple defeasible is a type of freehold estate that can be terminated upon the
occurrence of a specified event or condition. This category includes fee simple determinable
(automatically reverts when condition is violated) and fee simple condition subsequent (grantor
has right of entry to terminate). The scenario describes a qualified fee estate with a condition that
limits the use. Fee simple absolute has no such restrictions.
---
**Question #5**
A tenant installs a commercial refrigerator unit bolted to the floor of a leased retail space. When
the lease ends, the tenant removes the unit and repairs any damage. This refrigerator is legally
classified as:
A. A fixture that must remain with the property
B. A trade fixture that remains personal property
C. An emblement that belongs to the tenant
D. A permanent improvement that cannot be removed
**Correct Answer: B**
**Rationale:** Trade fixtures are items installed by a tenant for conducting business that remain
the personal property of the tenant, provided they are removed before the lease ends and any
damage is repaired. Unlike regular fixtures (which become part of the real property), trade
fixtures can be removed because they are essential to the tenant's business. Emblements are crops
planted by a tenant that belong to the tenant even after the lease ends.
---
**Question #6**
