Ch. 3 Exam

Question 1

The highest and most complete form of ownership estate in land is known as:

Answer 1

A fee simple absolute estate.

Question 2

And ownership interest in real property that has an indefinite (indeterminable) duration is known as:

Answer 2

A fee simple estate.

Question 3

In a state that can be freely transferred, encumbered, and inherited is known as a:

Answer 3

Fee simple estate.

The distinguishing feature of a fee simple estate is that it may be transferred by will.

Question 4

Which one of the following is not a characteristic of a fee simple estate?

Answer 4

It must be free of all encumbrances.

A fee simple estate may be freely encumbered. It does not have to be free of all encumbrances. It must be inheritable, transferable, and of indefinite duration.

Question 5

Ownership in severalty occurs when:

Answer 5

Only one person owns the property.

Question 6

Which one of the following statements is false?

Answer 6

The duration of the life estate will last throughout the life of the life tenant.

The duration of a life estate can be the lifetime of any individual named by the grantor; it need not be the lifetime of the life tenant.

All conveyances of a life estate must be in writing, A life estate can be conveyed to another by the life tenant, and a life tenant may encumber The property that is the subject of the life estate.

Question 7

Reversion means:

Answer 7

The property returns to the grantor upon expiration of the life estate.

Question 8

“to Paul Gray for his life, and then to Sean Kasey” creates what type of interest for Sean Casey?

Answer 8

An estate in remainder.

When a grantor stipulates that the property will transfer to a third-party at the end of the measuring life, the third-party has an estate in remainder and is known as the remainder man.

Question 9

A leasehold estate for a fixed term is an:

Answer 9

Estate for years.

And estate for years is a leasehold estate for a fixed term, such as six months.

Question 10

The most common basic form of concurrent ownership recognized in Nevada is:

Answer 10

Tenancy in common.

Any two unmarried persons having an undivided interest in a property and retain the right to Will their respective interest to another take title to the property as tenants in common.

Question 11

The type of concurrent ownership that requires unity of interest, unity of title, unity of time, unity of possession, and that includes the right of survivorship is known as:

Answer 11

Joint tenancy.

Each spouse has the right to Will their 50% ownership interest to someone other than their spouse and a tenancy in common has no right of survivorship. Therefore, joint tenancy is the only correct answer.

Question 12

Married couples will take title to real property as:

Answer 12

Joint tenants.

Nevada is a community property state. As such, all property acquired during the marriage is community property, except property acquired by inheritance, will, or gift. However, by far the most common way in which married persons vest title in Nevada is as joint tenants. Taking title to property as community property is very rare.

Question 13

Which one of the following statements about a corporation is false?

Answer 13

Shareholders in a corporation are personally liable for corporate debt.

A corporation is an artificial person, under the laws of Nevada is known as a domestic corporation, and the shares of stock issued to the owners of a corporation are securities regulated by the federal government.

Individual shareholders in a corporation share in the profits of the corporation, but have no personal liability for corporate debt.

Question 14

A real estate investment trust (REIT):

Answer 14

Involves one or more trustees who manage property for the beneficiaries, is an unincorporated syndicate to finance large real estate projects, and avoid double taxation, as long as at least 90% if it’s income is distributed to the shareholders.

Question 15

A type of partnership created for a single transaction or series of transactions is known as a:

Answer 15

Joint venture.

Question 16

Condominium ownership includes ownership of:

Answer 16

The unit in severalty and as a tenant in common in the common elements.

Question 17

All of the following statements are true regarding condominiums, except:

Answer 17

The sellers interest in common elements will be sold separately from the unit.

Each unit owner obtains separate financing to buy his/her unit, a lien can attach to a separate unit, and the sale of a unit does not generally require the approval of other unit owners.

Question 18

Condominium concepts and provisions are included within Nevada’s adoption of:

Answer 18

The common interest community uniform act.

While most states have adopted the uniform condominium act, Nevada has not. Nevada adopted the common uniform interest act, which sets forth the concepts and provisions of condominiums. NRS 117 is also devoted exclusively to condominiums.

Question 19

When an apartment building is converted to a condominium, which one of the following statements is true?

Answer 19

Each tenant must be given written notice that the building is to be converted.

One regulation designed to protect current tenants when an apartment building is converted to condominiums requires that each tenant be given written notice of the intent to convert.

Question 20

Which of the following statements are true regarding cooperatives?

Answer 20

A corporation owns the whole project. The persons who occupy the individual units are shareholders with a tenancy right to a particular unit under a proprietary lease and if one tenant in a cooperative defaults on his/her share of the mortgage payment, the remaining tenants must cure the default.

One blanket mortgage is taken out by the corporation for the entire project with the payments financed by the long-term purchase of shares, thus, a default in payment on the purchase of shares renders a portion of the underlying blanket loan in default, which must be cured by the remaining tenants or shareholders.