PSI TN State RE Exam Questions and answers latest update

PSI TN State RE Exam
A farmer temporarily installs produce coolers in a leased farm stand in order to prevent
spoilage.
The coolers would be considered which of the following?
a. Trade fixtures that are real property.
b. Trade fixtures that are personal property.
c. Temporary real property.
d. Emblements. - CORRECT ANSWER-(b) Trade fixtures that are personal property.

Trade fixtures are items of a tenant's personal property that the tenant has temporarily
affixed to a
landlord's real property in order to conduct business. Trade fixtures may be detached
and removed before
or upon surrender of the leased premises. Should the tenant fail to remove a trade
fixture, it may become
the property of the landlord through accession. Thereafter, the fixture is considered real
property.

Property can be converted from real to personal property and from personal property to
real property
by means of which processes, respectively?
a. Assemblage and plottage.
b. Application and dissolution.
c. Severance and affixing.
d. Planting and harvesting. - CORRECT ANSWER-(c) Severance and affixing.

Severance is the conversion of real property to personal property by detaching it from
the real estate;
affixing, or attachment, is the act of converting personal property to real property by
attaching it to the real
estate, such as by assembling a pile of bricks into a barbecue pit, or constructing a boat
dock from wood
planks.

The highest form of ownership interest one can acquire in real estate is the
a. legal life estate.
b. conventional life estate.
c. defeasible fee simple estate.
d. absolute fee simple estate. - CORRECT ANSWER-(d) absolute fee simple estate.

The fee simple freehold estate is the highest form of ownership interest one can acquire
in real estate. It

,includes the complete bundle of rights, and the tenancy is unlimited, with certain
exceptions. The fee
simple absolute estate is a perpetual estate that is not conditioned by stipulated or
restricted uses.

The distinguishing feature of a defeasible fee simple estate is that
a. it can be passed on to heirs.
b. it has no restrictions on use.
c. the estate may revert to a grantor or heirs if the prescribed use changes.
d. it is of unlimited duration. - CORRECT ANSWER-(c) the estate may revert to a
grantor or heirs if the prescribed use changes.

The defeasible fee estate is perpetual, provided the usage conforms to stated
conditions. Essential
characteristics are: the property must be used for a certain purpose or under certain
conditions; and, if the
use changes or if prohibited conditions are present, the estate reverts to the previous
grantor of the estate.

Maria acquires a property from her uncle Alfonso. When Maria dies, the estate will pass
to
Alfonso's other niece, Serena. The type of estate that Maria has in the property is a
a. conventional life estate.
b. legal life estate.
c. fee simple defeasible estate.
d. tenancy by the entireties. - CORRECT ANSWER-(a) conventional life estate.

A conventional life estate is a freehold estate that is limited in duration to the life of the
owner or other
named person. Upon the death of the owner or other named individual, the estate
passes to the original
owner or another named party. A legal life estate is created by law as opposed to a
property owner's
choice.

One difference between a cooperative estate and a condominium estate is that
a. a condominium owner owns a unit of air space whereas the co-op owner owns a
proprietary lease.
b. a condominium sale adversely affects other unit owners.
c. the coop owner owns stock and a freehold real estate interest whereas the
condominium owner simply a proprietary lease.
d. the condominium owner owns the common elements and the airspace whereas the
coop owner only owns the apartment. - CORRECT ANSWER-(a) a condominium owner
owns a unit of air space whereas the co-op owner owns a proprietary
lease.

,The owner of a condominium has a fee-simple ownership interest in his/her unit and its
air space. Whereas, a co-op owner has a leasehold, not fee-simple, interest with the
property's corporation. Since the corporation owns an undivided interest in the
cooperative property, debts and financial obligations apply to
the property as a whole, not to individual units as in a condominium.

Who are the essential parties involved in an estate in trust?
a. Owner, trustor and lawyer.
b. Owner, trustor and trustee.
c. Trustee, title company, and beneficiary.
d. Trustor, trustee and beneficiary. - CORRECT ANSWER-(d) Trustor, trustee, and
beneficiary.

In an estate in trust, a fee owner-- the grantor or trustor-- transfers legal title to a
fiduciary-- the trustee--
who holds and manages the estate for the benefit of another party, the beneficiary.

A condominium owner enjoys a
a. share in an association that owns one's apartment.
b. tenancy in common interest in airspace and common areas of the property.
c. fee simple ownership of the airspace in a unit and an undivided share of the entire
property's
common areas.
d. fee simple ownership of a pro rata share of the entire property. - CORRECT
ANSWER-(c) fee simple ownership of the airspace in a unit and an undivided share of
the entire property's
common areas.

A condominium is a hybrid form of ownership of multi-unit residential or commercial
properties. It
combines ownership of a fee simple interest in the airspace within a unit with ownership
of an undivided
share, as a tenant in common, of the entire property's common elements, such as
lobbies, swimming pools,
and hallways.

With various types of junior liens, the order of payment priority is generally established
according to
a. the date of recordation.
b. what form of tax is in question.
c. the order of disbursement.
d. whether the lien was subordinated. - CORRECT ANSWER-(a) the date of
recordation.

Among junior liens, date of recording determines priority. The rule is: the earlier the
recording date of the

, lien, the higher its priority. For example, if a judgment lien is recorded against a property
on Friday, and a
mortgage lien is recorded on the following Tuesday, the judgment lien has priority and
must be satisfied in
a foreclosure ahead of the mortgage lien.

What is a lien-theory state in contrast to a title-theory state?
a. A state in which liens are given priority over other encumbrances.
b. A state in which a mortgagor retains title to the property when a mortgage lien is
created.
c. A state in which the holder of a mortgage lien receives title to the mortgaged property
until the
debt is satisfied.
d. A state in which liens must be recorded to be enforceable. - CORRECT ANSWER-(b)
A state in which a mortgagor retains title to the property when a mortgage lien is
created.

In lien-theory states, laws give a lender on a mortgaged property equitable title rather
than legal title. The
mortgagor in a lien theory state retains legal title.

A property owner has an easement appurtenant on her property. One day the property
is sold to another party who is opposed to the easement. Following the closing, this
particular form of easement

a. terminates.
b. transfers with the property.
c. transfers with the owner to a new property.
d. becomes a license on the property. - CORRECT ANSWER-(b) transfers with the
property.

The term appurtenant means "attaching to." An easement appurtenant attaches to the
estate and transfers
with it unless specifically stated otherwise in the transaction documents.

What fundamental legal purpose is fulfilled by title records?

a. Keeping the county apprised of tax payments.
b. Preventing identity theft.
c. Giving constructive notice of one's rights and interests in the property.
d. Assembling all relevant documents in a single place. - CORRECT ANSWER-(c)
Giving constructive notice of one's rights and interests in the property.

Recorded instruments may include deeds, mortgages, liens, easements, sale contracts,
marriage, probate, and tax records. The primary purpose of recording and maintaining