RM 303 Final Exam Study Guide Questions and
Verified Answers
(Chapter 1)
Real estate
vs.
Real property Correct Answer: Real estate = a tangible (physical) asset.
It is manmade improvement permanently attached to the land.
Real property = a bundle of intangible rights (e.g. possession, use, and disposition) associated with the
ownership and use of land and improvements.
How real estate markets are different from the markets for assets that trade in well-developed public
markets? Correct Answer: 4.
Characteristics of Real Estate
o Heterogeneous Products
(vs homogeneous products)
- Age
- building design,
- location
o Immobile products
o Localized markets
o Segmented Markets
,o Heterogeneous Products
- Office,
- Residential,
- Industry,
- etc.
o Individual/institutional private investors
o High Transaction Costs
(Chapter 2)
Real property
vs.
personal property
-What's fixture?
-The 4 rules to determine whether an object has become a fixture. Correct Answer: Real property = a
bundle of intangible rights
(e.g. possession, use, and disposition)
associated with the ownership and use of land and improvements.
A fixture = an object that was formerly personal property but has converted to real property.
4 rules to determine whether an object has become a fixture:
1) manner of attachment,
2) manner of adaption,
, 3) intention of parities
4) relation of the parities (variant of intention)
Under the "rule of intention", a kitchen appliance in a single-family residence is expected to remain with
the seller when the residence is sold.
On the other hand, if the appliances are furnishings in a rental apartment building, they normally would
be expected to remain with the building.
Thus, the rule of intention would treat the appliances as personal property in the single-family residence
case and as fixtures in the apartment case.
Possessory interests
vs.
Non-possessory interests Correct Answer: Possessory (Current) Interests (Estates)
Possessory: A real property interest that includes the right of exclusive possession
Non-possessory interests:
1. Easements = The right to use land for a specific and limited purpose.
2. Restrictive Covenants (Deed Restrictions) = Promises made by a land owner or predecessor in title that
the land will or will not be used in certain ways.
3. Lien = A claim one person has on the property of another as either security for a debt or fulfillment of
some monetary charge or obligation.
Ownership estates (Freeholds or titled interests)
vs.
Leasehold estates (Non-freehold estates) Correct Answer: 2.1.1 Ownership Estates (Freeholds or titled
interests)
a) Fee simple Absolute
Verified Answers
(Chapter 1)
Real estate
vs.
Real property Correct Answer: Real estate = a tangible (physical) asset.
It is manmade improvement permanently attached to the land.
Real property = a bundle of intangible rights (e.g. possession, use, and disposition) associated with the
ownership and use of land and improvements.
How real estate markets are different from the markets for assets that trade in well-developed public
markets? Correct Answer: 4.
Characteristics of Real Estate
o Heterogeneous Products
(vs homogeneous products)
- Age
- building design,
- location
o Immobile products
o Localized markets
o Segmented Markets
,o Heterogeneous Products
- Office,
- Residential,
- Industry,
- etc.
o Individual/institutional private investors
o High Transaction Costs
(Chapter 2)
Real property
vs.
personal property
-What's fixture?
-The 4 rules to determine whether an object has become a fixture. Correct Answer: Real property = a
bundle of intangible rights
(e.g. possession, use, and disposition)
associated with the ownership and use of land and improvements.
A fixture = an object that was formerly personal property but has converted to real property.
4 rules to determine whether an object has become a fixture:
1) manner of attachment,
2) manner of adaption,
, 3) intention of parities
4) relation of the parities (variant of intention)
Under the "rule of intention", a kitchen appliance in a single-family residence is expected to remain with
the seller when the residence is sold.
On the other hand, if the appliances are furnishings in a rental apartment building, they normally would
be expected to remain with the building.
Thus, the rule of intention would treat the appliances as personal property in the single-family residence
case and as fixtures in the apartment case.
Possessory interests
vs.
Non-possessory interests Correct Answer: Possessory (Current) Interests (Estates)
Possessory: A real property interest that includes the right of exclusive possession
Non-possessory interests:
1. Easements = The right to use land for a specific and limited purpose.
2. Restrictive Covenants (Deed Restrictions) = Promises made by a land owner or predecessor in title that
the land will or will not be used in certain ways.
3. Lien = A claim one person has on the property of another as either security for a debt or fulfillment of
some monetary charge or obligation.
Ownership estates (Freeholds or titled interests)
vs.
Leasehold estates (Non-freehold estates) Correct Answer: 2.1.1 Ownership Estates (Freeholds or titled
interests)
a) Fee simple Absolute
