Real Estate Fundamentals Exam #1 with complete solutions

Real Estate - Answer- land and things attached to the land Property - Answer- any objects that can be owned or possessed Real Property - Answer- consists of legal interest in land and things attached to the land Personal Property - Answer- includes legal interests in all other types property; chattel Title - Answer- ownership rights to real property Deed - Answer- the document normally used to convey the rights from one party to another Lease - Answer- the document used to convey the rights from the property owner to the tenant Fixture - Answer- Personal property that becomes part of the real property when it is attached to the land or a building Test of Intent of the Parties - Answer- the most crucial test used to determine whether something is a fixture or personal property Trade Fixtures - Answer- personal property used in a trade or business Water Rights - Answer- the right to withdraw water from the land Riparian Rights Doctrine - Answer- all owners whose land underlies or borders the water have equal rights to the water (dominant in the Eastern US) Prior Appropriation Doctrine - Answer- The first person to use a body of water for some beneficial economic purpose has a right to use all the water desired, even if landowners who later find a use for the water may be precluded from using it (dominant in the Western US) Estates in Land - Answer- collections or bundles of ownership interests in real property Freehold Estates - Answer- own the estate Leasehold estates - Answer- the right to use or possess but not own property owned by someone else Grantor - Answer- the party who transfers a real property interest Grantee - Answer- the party who receives the interest Lessor - Answer- the landlord in a leasehold estate Lessee - Answer- the tenant in a leasehold estate Fee Simple Absolute Estate - Answer- the fullest and most complete set of ownership rights one can possess in real property Alienable - Answer- the owner can transfer any interest in the property while living Devisable - Answer- interest can be transferred by a will on the death of the owner Descendible - Answer- the interest passes to the owners legal heirs if he or she dies without a valid will Qualified Fee Estate - Answer- the owners rights can be "defeased" or lost in the future should a stated event or condition come to pass Reversions - Answer- the future interests that follow qualified fee estates Life Estate - Answer- a type of freehold estate that terminates automatically and immediately upon the death of a named person Estate pur autre vie - Answer- when the life tenant is someone other than the person whose life the life estate is tied to Remainderman - Answer- the party who holds the remainder interest associated with a life estate Vested Remainder - Answer- when the remainderman is guaranteed ownership of the property at some time in the future Contingent Remainder - Answer- exists when there are conditions attached to the remainder interest that could prevent the remainderman from receiving a present interest in the property Tenancy for a Stated Period - Answer- when a landlord and a tenant enter into an agreement for a specified term Tenancy from Period to Period - Answer- created when landlord and tenant agree to contine their relationship from year to year or month to month, or some other period length Tenancy at Will - Answer- When parties enter into a lease agreement without specifying either a termination date or a period length Tenancy at Sufference - Answer- when a tenant is in possession of a landlords property against the wishes of the landlord Eviction - Answer- the legal process used by lessors to terminate leasehold estates when lessees fail to abide by the lease terms or refuse to return possession of the property at the termination of a leasehold estate. Estates in Severalty - Answer- estates "standing alone"; only one person or legal entity owns each interest Concurrent Estates - Answer- joint ownership Tenancy in Common - Answer- Each of the joint owners holds an undivided, proportional interest in the entire property Joint Tenancy - Answer- similar to tenancy in common except it carries with it the Right of Survivorship. If a co-owner should die, the other owner or owners automatically divide the share owned by the deceased. Tenancy by the Entirety - Answer- a specialized type of joint tenancy that can be created only between husbands and wives-share equally Community Property - Answer- all property acquired during the marriage, whether real or personal, is considered property of the "marital community" Condominium - Answer- all owners typically have fee simple titles to their personal unites, while common areas such as sidewalks, yards, entrances, hallways, pools, tennis courts, and other recreational facilities are jointly owned in a tenancy in common or some other form of concurrent ownership Bylaws - Answer- Represent a private contract among property owners regarding the operation of the condominium Cooperative - Answer- co-op the land and building usually are owned by a nonprofit corporation specifically created for the purpose of owning the property-individual residents own stock in the corporation that owns the property and thus have the right to occupy a particular unit in the property Proprietary Lease - Answer- owners in a co-op have this for a specific unit rather than a fee simple ownership of real property Time-share - Answer- or interval ownership is a type of concurrent estate that splits ownership by time Fee Interest Time-Share - Answer- divides the ownership of a unit usually a resort condominium into 52 separate, weekly intervals Right to Use Time-Share - Answer- a lease arrangement with a leasehold interest for a specific number of years Metes-and-Bounds Description - Answer- the original way to achieve a formal legal description of the exact boundaries of any piece of land was to refer to its corners and boundary lines. Each description must start with a point of beginning Metes - Answer- the distances used in a description Bounds - Answer- the directions of the boundaries that enclose a piece of land Rectangular Survey System - Answer- based on principal meridians (north and south) and base lines (East and west) divides each township into 36 equal-sized sections Range Lines - Answer- the land on each side of the principal meridian is divided into six-mile-wide strips Township lines - Answer- the land that runs east and west along the north and south of the base line Township - Answer- the range and township lines form the basic unit of the rectangular survey, an area of land six miles square Plats - Answer- Engineers' drawings of parcels of real estate Air Lot - Answer- property does not actually touch the ground Encumbrances - Answer- Restrictions and Limitations generally run with the land, they are binding on anyone who gains a subsequent interest in the property Covenants, Conditions, and Restrictions - Answer- CC&Rs private encumbrances that limit the way a property owner can use a property. Promises made by a landowner about how the property will or will not be used that are enforceable through the court system by the parties who expect to benefit from the promsies Lien - Answer- a claim on a property as either security for a debt or fulfillment of some monetary obligation A Specific Lien - Answer- created to secure debts that are associated with a particular parcel of real estate General Lien - Answer- placed on all of the property that might be owned by an individual, including any real estate Mortgage - Answer- the most common encumbrance on an owners title. Mortgagor - Answer- the borrower of the loan Mortgagee - Answer- the lender that receives the benefits of this lien Mechanic's Lien - Answer- protects those who provide labor or materials for real estate improvements Easement - Answer- a right given to one party by a landowner to use the land in a specified manner (permanent) Easement Appurtenant - Answer- when an easement is legally connected to an adjoining property (Dominant Estates and Servient Estates) Easement in Gross - Answer- there is no dominant estate, only a servient estate Easement by Prescription - Answer- may be created when someone other than the owner uses the land "openly, hostilely, and continuously" for a statutory time period License - Answer- a revocable personal privilege to use land for a particular purpose Conservation Easement - Answer- a type of negative easement that prevents specific uses of the real estate by the owner Profit a Prendre - Answer- a nonpossessory interest in real property that permits the holder to remove part of the soil or produce of the land Encroachment - Answer- and unauthorized invasion or intrusion of a fixture, a building, or other improvement onto another person;s property Adverse Possession - Answer- allows individuals to acquire title to land they do not own because they have openly possessed it for a statutory period of time, usually 7 to 20 years Market Value - Answer- generally defined as the price that the property probably would bring in the market, given knowledgeable and willing buyers and sellers who act under no unusual pressures and who have a reasonable time to complete the transaction