Real Estate Final Exam —Questions
PERRY REAL ESTATE COLLEGE
FINAL EXAM
Questions with Answers | Latest Update| Pass Guaranteed
1. The 'bundle of rights' in real property ownership includes the rights of possession,
control, exclusion, enjoyment, and:
A. Taxation
B. Disposition
C. Escheat
D. Eminent domain
Answer: B. Disposition
Rationale: Disposition is the right to sell, gift, lease or will the property. Taxation,
escheat, eminent domain and police power are the four government limitations on
private ownership, not rights held by the owner.
2. Which of the following is considered real property?
A. A refrigerator delivered to the home last week
B. A built-in dishwasher permanently installed in the cabinetry
C. A stack of lumber in the garage
D. A tenant's display shelving bolted in for business use
Answer: B. A built-in dishwasher permanently installed in the cabinetry
Rationale: A fixture is personal property that has become real property through
attachment. The built-in dishwasher is annexed and adapted to the realty. Loose
appliances and unattached materials remain personalty, and trade fixtures installed
by a commercial tenant remain the tenant's personal property and are removable
before lease end.
3. The legal test most often applied to determine whether an item is a fixture
considers method of attachment, adaptation to the realty, relationship of the parties,
and:
A. The cost of the item
B. The intent of the person who installed it
C. The age of the building
D. Whether the item is insured
Answer: B. The intent of the person who installed it
Page 1 of 33
, Real Estate Final Exam —Questions
Rationale: Intent is generally the controlling factor, with the other tests serving as
objective evidence of intent. Because the test is fact-specific, the practical solution is
to list questionable items expressly in the purchase agreement as included or
excluded.
4. A fee simple absolute estate is best described as:
A. Ownership limited to the life of a named person
B. The highest and most complete form of ownership, of unlimited duration and
freely inheritable
C. Ownership that automatically reverts upon a stated event
D. A leasehold of indefinite length
Answer: B. The highest and most complete form of ownership, of unlimited
duration and freely inheritable
Rationale: Fee simple absolute carries the full bundle of rights, continues indefinitely,
and passes by will or descent. Defeasible fees terminate or may be terminated upon
a condition, and a life estate is measured by a life.
5. A grantor conveys property 'to Maria for life, then to Jordan.' Jordan holds a:
A. Reversion
B. Remainder
C. Reverter
D. Leasehold
Answer: B. Remainder
Rationale: When the future interest following a life estate is held by a third party it is
a remainder; when the interest returns to the grantor it is a reversion. Maria, the life
tenant, may use and profit from the property but may not commit waste that
damages the remainderman's interest.
6. A life estate 'pur autre vie' is measured by:
A. The life of the life tenant
B. The life of a person other than the life tenant
C. A fixed term of 21 years
D. The life of the grantor only
Answer: B. The life of a person other than the life tenant
Rationale: Pur autre vie means 'for the life of another.' Because the measuring life is
someone else's, the estate can be inherited by the life tenant's heirs until the
measuring life ends, at which point it terminates.
Page 2 of 33
, Real Estate Final Exam —Questions
7. A tenant who holds under a lease with a definite beginning and ending date has:
A. An estate at will
B. An estate for years
C. A periodic estate
D. An estate at sufferance
Answer: B. An estate for years
Rationale: An estate for years is any leasehold with a definite term, whether one
week or ninety-nine years, and it terminates automatically without notice. A periodic
tenancy renews automatically until proper notice is given; an estate at sufferance
exists when a tenant holds over without consent.
8. Riparian rights pertain to land bordering:
A. An ocean or sea
B. A flowing waterway such as a river or stream
C. A lake only
D. Underground water
Answer: B. A flowing waterway such as a river or stream
Rationale: Riparian rights attach to flowing water; littoral rights attach to land
bordering a lake, sea or ocean where the owner's interest generally runs to the
average high-water mark. Prior appropriation, used in many western states,
allocates water by permit rather than by adjacency.
9. Air rights above a parcel:
A. Are unlimited and extend indefinitely upward
B. May be sold or leased separately from the surface, subject to reasonable public
use of navigable airspace
C. Cannot be transferred
D. Belong to the municipality
Answer: B. May be sold or leased separately from the surface, subject to
reasonable public use of navigable airspace
Rationale: Air rights are a transferable component of the bundle and support
development such as buildings constructed over rail yards. They are limited by
federal regulation of navigable airspace and by local height and zoning restrictions.
SECTION 2 — FORMS OF OWNERSHIP AND LEGAL DESCRIPTIONS
Page 3 of 33
, Real Estate Final Exam —Questions
10. The distinguishing characteristic of joint tenancy is:
A. Unequal shares are permitted
B. The right of survivorship
C. Ownership is limited to spouses
D. Interests may be created at different times
Answer: B. The right of survivorship
Rationale: Joint tenancy requires the four unities of time, title, interest and
possession, and carries survivorship, so the deceased joint tenant's interest passes to
survivors outside of probate. Tenancy in common permits unequal shares acquired
at different times and passes by will or intestacy.
11. If one joint tenant sells her interest to an outsider, the new owner holds title as:
A. A joint tenant with the remaining owners
B. A tenant in common with the remaining owners, who remain joint tenants
between themselves
C. A tenant by the entirety
D. A life tenant
Answer: B. A tenant in common with the remaining owners, who remain joint
tenants between themselves
Rationale: The sale destroys the unities of time and title as to that share, severing
the joint tenancy for that interest. If three joint tenants existed and one sells, the
buyer owns a one-third interest as a tenant in common while the other two continue
as joint tenants with survivorship between them.
12. Tenancy by the entirety is available only to:
A. Business partners
B. Married couples, in states that recognize it
C. Family members
D. Corporations
Answer: B. Married couples, in states that recognize it
Rationale: It is a marital form combining survivorship with a unity of person, so
neither spouse may convey or encumber the property alone and it generally enjoys
protection from the separate creditors of one spouse. Not all states recognize it, and
several community property states use different marital forms.
13. An owner of a condominium unit typically holds:
Page 4 of 33
PERRY REAL ESTATE COLLEGE
FINAL EXAM
Questions with Answers | Latest Update| Pass Guaranteed
1. The 'bundle of rights' in real property ownership includes the rights of possession,
control, exclusion, enjoyment, and:
A. Taxation
B. Disposition
C. Escheat
D. Eminent domain
Answer: B. Disposition
Rationale: Disposition is the right to sell, gift, lease or will the property. Taxation,
escheat, eminent domain and police power are the four government limitations on
private ownership, not rights held by the owner.
2. Which of the following is considered real property?
A. A refrigerator delivered to the home last week
B. A built-in dishwasher permanently installed in the cabinetry
C. A stack of lumber in the garage
D. A tenant's display shelving bolted in for business use
Answer: B. A built-in dishwasher permanently installed in the cabinetry
Rationale: A fixture is personal property that has become real property through
attachment. The built-in dishwasher is annexed and adapted to the realty. Loose
appliances and unattached materials remain personalty, and trade fixtures installed
by a commercial tenant remain the tenant's personal property and are removable
before lease end.
3. The legal test most often applied to determine whether an item is a fixture
considers method of attachment, adaptation to the realty, relationship of the parties,
and:
A. The cost of the item
B. The intent of the person who installed it
C. The age of the building
D. Whether the item is insured
Answer: B. The intent of the person who installed it
Page 1 of 33
, Real Estate Final Exam —Questions
Rationale: Intent is generally the controlling factor, with the other tests serving as
objective evidence of intent. Because the test is fact-specific, the practical solution is
to list questionable items expressly in the purchase agreement as included or
excluded.
4. A fee simple absolute estate is best described as:
A. Ownership limited to the life of a named person
B. The highest and most complete form of ownership, of unlimited duration and
freely inheritable
C. Ownership that automatically reverts upon a stated event
D. A leasehold of indefinite length
Answer: B. The highest and most complete form of ownership, of unlimited
duration and freely inheritable
Rationale: Fee simple absolute carries the full bundle of rights, continues indefinitely,
and passes by will or descent. Defeasible fees terminate or may be terminated upon
a condition, and a life estate is measured by a life.
5. A grantor conveys property 'to Maria for life, then to Jordan.' Jordan holds a:
A. Reversion
B. Remainder
C. Reverter
D. Leasehold
Answer: B. Remainder
Rationale: When the future interest following a life estate is held by a third party it is
a remainder; when the interest returns to the grantor it is a reversion. Maria, the life
tenant, may use and profit from the property but may not commit waste that
damages the remainderman's interest.
6. A life estate 'pur autre vie' is measured by:
A. The life of the life tenant
B. The life of a person other than the life tenant
C. A fixed term of 21 years
D. The life of the grantor only
Answer: B. The life of a person other than the life tenant
Rationale: Pur autre vie means 'for the life of another.' Because the measuring life is
someone else's, the estate can be inherited by the life tenant's heirs until the
measuring life ends, at which point it terminates.
Page 2 of 33
, Real Estate Final Exam —Questions
7. A tenant who holds under a lease with a definite beginning and ending date has:
A. An estate at will
B. An estate for years
C. A periodic estate
D. An estate at sufferance
Answer: B. An estate for years
Rationale: An estate for years is any leasehold with a definite term, whether one
week or ninety-nine years, and it terminates automatically without notice. A periodic
tenancy renews automatically until proper notice is given; an estate at sufferance
exists when a tenant holds over without consent.
8. Riparian rights pertain to land bordering:
A. An ocean or sea
B. A flowing waterway such as a river or stream
C. A lake only
D. Underground water
Answer: B. A flowing waterway such as a river or stream
Rationale: Riparian rights attach to flowing water; littoral rights attach to land
bordering a lake, sea or ocean where the owner's interest generally runs to the
average high-water mark. Prior appropriation, used in many western states,
allocates water by permit rather than by adjacency.
9. Air rights above a parcel:
A. Are unlimited and extend indefinitely upward
B. May be sold or leased separately from the surface, subject to reasonable public
use of navigable airspace
C. Cannot be transferred
D. Belong to the municipality
Answer: B. May be sold or leased separately from the surface, subject to
reasonable public use of navigable airspace
Rationale: Air rights are a transferable component of the bundle and support
development such as buildings constructed over rail yards. They are limited by
federal regulation of navigable airspace and by local height and zoning restrictions.
SECTION 2 — FORMS OF OWNERSHIP AND LEGAL DESCRIPTIONS
Page 3 of 33
, Real Estate Final Exam —Questions
10. The distinguishing characteristic of joint tenancy is:
A. Unequal shares are permitted
B. The right of survivorship
C. Ownership is limited to spouses
D. Interests may be created at different times
Answer: B. The right of survivorship
Rationale: Joint tenancy requires the four unities of time, title, interest and
possession, and carries survivorship, so the deceased joint tenant's interest passes to
survivors outside of probate. Tenancy in common permits unequal shares acquired
at different times and passes by will or intestacy.
11. If one joint tenant sells her interest to an outsider, the new owner holds title as:
A. A joint tenant with the remaining owners
B. A tenant in common with the remaining owners, who remain joint tenants
between themselves
C. A tenant by the entirety
D. A life tenant
Answer: B. A tenant in common with the remaining owners, who remain joint
tenants between themselves
Rationale: The sale destroys the unities of time and title as to that share, severing
the joint tenancy for that interest. If three joint tenants existed and one sells, the
buyer owns a one-third interest as a tenant in common while the other two continue
as joint tenants with survivorship between them.
12. Tenancy by the entirety is available only to:
A. Business partners
B. Married couples, in states that recognize it
C. Family members
D. Corporations
Answer: B. Married couples, in states that recognize it
Rationale: It is a marital form combining survivorship with a unity of person, so
neither spouse may convey or encumber the property alone and it generally enjoys
protection from the separate creditors of one spouse. Not all states recognize it, and
several community property states use different marital forms.
13. An owner of a condominium unit typically holds:
Page 4 of 33
