PSI TN State RE Exam questions with
complete solutions graded A+
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?
complete solutions graded A+
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?
