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NATIONAL REAL ESTATE LICENSING
EXAM PRACTICE EXAM – 40 QUESTIONS
WITH VERIFIED ANSWERS & COMPLETE
RATIONALES
## SECTION 1: PROPERTY OWNERSHIP & ESTATES
**1. Which of the following best describes "fee simple absolute"
ownership?**
A. Ownership that lasts for the life of the owner only
B. Ownership subject to specific conditions that, if violated,
cause reversion
C. The highest form of ownership with unlimited duration and
transferability
D. Ownership shared equally among multiple parties with right
of survivorship
**Correct answer:** The highest form of ownership with
unlimited duration and transferability
**Rationale:** Fee simple absolute represents the most
complete ownership interest, with indefinite duration, full
transfer rights, and inheritability. A life estate terminates upon
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death, fee simple defeasible can be lost if conditions are
breached, and joint tenancy involves survivorship rights .
---
**2. A property owner divides a parcel into two lots and sells
one to a buyer. The deed includes a clause prohibiting the
construction of a fence above four feet in height. This restriction
is an example of which type of encumbrance?**
A. Lien
B. Restrictive covenant
C. Easement by prescription
D. License
**Correct answer:** Restrictive covenant
**Rationale:** A restrictive covenant is a private limitation on
land use, often imposed by a deed or subdivision plat, that
restricts the manner in which the property may be used. A lien
is a monetary claim, an easement by prescription is acquired
through continuous use, and a license is a revocable
permission .
---
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**3. A married couple purchases a home together. Upon the
death of one spouse, the surviving spouse automatically
becomes the sole owner of the property without probate. What
type of ownership is this?**
A. Tenancy in common
B. Joint tenancy
C. Tenancy by the entirety
D. Community property
**Correct answer:** Tenancy by the entirety
**Rationale:** Tenancy by the entirety is a form of joint
ownership available only to married couples that includes the
right of survivorship; when one spouse dies, the surviving
spouse automatically receives full title without the property
passing through probate .
---
**4. Three business partners purchase an office building
together. Each partner owns an equal one-third interest, and
there is no right of survivorship. If one partner dies, what
happens to their interest?**
A. It automatically passes to the surviving partners
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B. It passes to the deceased partner's heirs or as directed by
will
C. It reverts to the state through escheat
D. It is divided equally among all three partners
**Correct answer:** It passes to the deceased partner's heirs or
as directed by will
**Rationale:** Tenancy in common allows multiple owners to
hold undivided interests with no right of survivorship; upon
death, a tenant in common's interest passes to their heirs or
beneficiaries according to their will or state intestacy laws .
---
**5. A person who holds a life estate based on the lifetime of
another person rather than their own life is correctly said to hold
which type of life estate?**
A. Estate for years
B. Periodic estate
C. Pur autre vie
D. Estate in reversion
**Correct answer:** Pur autre vie
NATIONAL REAL ESTATE LICENSING
EXAM PRACTICE EXAM – 40 QUESTIONS
WITH VERIFIED ANSWERS & COMPLETE
RATIONALES
## SECTION 1: PROPERTY OWNERSHIP & ESTATES
**1. Which of the following best describes "fee simple absolute"
ownership?**
A. Ownership that lasts for the life of the owner only
B. Ownership subject to specific conditions that, if violated,
cause reversion
C. The highest form of ownership with unlimited duration and
transferability
D. Ownership shared equally among multiple parties with right
of survivorship
**Correct answer:** The highest form of ownership with
unlimited duration and transferability
**Rationale:** Fee simple absolute represents the most
complete ownership interest, with indefinite duration, full
transfer rights, and inheritability. A life estate terminates upon
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death, fee simple defeasible can be lost if conditions are
breached, and joint tenancy involves survivorship rights .
---
**2. A property owner divides a parcel into two lots and sells
one to a buyer. The deed includes a clause prohibiting the
construction of a fence above four feet in height. This restriction
is an example of which type of encumbrance?**
A. Lien
B. Restrictive covenant
C. Easement by prescription
D. License
**Correct answer:** Restrictive covenant
**Rationale:** A restrictive covenant is a private limitation on
land use, often imposed by a deed or subdivision plat, that
restricts the manner in which the property may be used. A lien
is a monetary claim, an easement by prescription is acquired
through continuous use, and a license is a revocable
permission .
---
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**3. A married couple purchases a home together. Upon the
death of one spouse, the surviving spouse automatically
becomes the sole owner of the property without probate. What
type of ownership is this?**
A. Tenancy in common
B. Joint tenancy
C. Tenancy by the entirety
D. Community property
**Correct answer:** Tenancy by the entirety
**Rationale:** Tenancy by the entirety is a form of joint
ownership available only to married couples that includes the
right of survivorship; when one spouse dies, the surviving
spouse automatically receives full title without the property
passing through probate .
---
**4. Three business partners purchase an office building
together. Each partner owns an equal one-third interest, and
there is no right of survivorship. If one partner dies, what
happens to their interest?**
A. It automatically passes to the surviving partners
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B. It passes to the deceased partner's heirs or as directed by
will
C. It reverts to the state through escheat
D. It is divided equally among all three partners
**Correct answer:** It passes to the deceased partner's heirs or
as directed by will
**Rationale:** Tenancy in common allows multiple owners to
hold undivided interests with no right of survivorship; upon
death, a tenant in common's interest passes to their heirs or
beneficiaries according to their will or state intestacy laws .
---
**5. A person who holds a life estate based on the lifetime of
another person rather than their own life is correctly said to hold
which type of life estate?**
A. Estate for years
B. Periodic estate
C. Pur autre vie
D. Estate in reversion
**Correct answer:** Pur autre vie
