Interest in Real Estate

Question 1

When a property’s ownership is recorded publicly so everyone can know the contents of recorded documents

Answer 1

Constructive Notice

Question 2

When an individual actually knows of the fact b/c the buyer has taken possession of the property which is an action that creates _______ ________ that others can observe directly.

Answer 2

actual notice

Question 3

The official opinion of an attorney regarding the condition of a property’s title

Answer 3

opinion of title

Question 4

A condensed history of title to a tract of land that summarizes the transfers of ownership & encumbrances

Answer 4

abstract of title

Question 5

A policy that protects homeowners from certain financial losses due to title issues, such as defects, encumbrances, & liens

Answer 5

Title Insurance

Question 6

Real estate license holders are required to tell every buyer they should….

Answer 6

obtain an abstract of title & have it examined by an attorney or receive a policy of title insurance.

Question 7

The degree, quantity, & extent of interest one owns in a property

Answer 7

Estate

Question 8

• Estates that are created as a matter of state law
• Can vary from state to state

Answer 8

Statutory Estates

Question 9

What are the 4 main types of estates?

Answer 9

1.) Freehold Estates
2.) Leasehold Estates
3.) Equitable Estates
4.) Concurrent Estates

Question 10

The individual w/interest has some degree of ownership for an undetermined/unspecified & unlimited period of time

Answer 10

Freehold Estates

Question 11

What are the 3 types of freehold estates?

Answer 11

1.) Fee Simple Estates
2.) Defeasible Fee Estates
3.) Life Estates

Question 12

• The least limited, most absolute, interest in real property
• of indefinite duration, freely transferable, & freely inheritable
• owner has the clearest & most pure ownership of the property w/o any strings attached

Answer 12

Fee Simple Estate

Question 13

• A property interest characterized by perpetual ownership on the condition that the property is used for a certain purpose or under specific conditions
• Ownership reverts back to the original owner if these stipulations are violated

Answer 13

Defeasible Fee Estates

Question 14

What are the 2 common forms of defeasible fee estates?

Answer 14

1.) Fee Simple Determinable
2.) Fee Simple Subject to Condition Subsequent

Question 15

This particular defeasible estate will come to an end automatically & immediately upon the occurrence of a designated event, the time of such occurrence is uncertain.

Answer 15

Fee simple determinable estate

Question 16

The previous owner would have to go to court to prove that they should be the owner

Answer 16

Fee Simple Subject to Condition Subsequent

Question 17

If the reversion to the original owner is automatic, then it is a ___ ______ _________ estate, but if the reversion requires going to court, then it is ______ __ _ _______ _________.

Answer 17

Fee simple determinable, subject to a condition subsequent

Question 18

Refers to the estate that will pass to another party at the death of the person upon whom the life estate is based

Answer 18

Remainder

Question 19

• When the property reverts back to the person who granted it in the 1st place once the life estate’s measuring life ends
• “Right of reverter”

Answer 19

Reversionary Interest

Question 20

Refers to the recipient of the remainder

Answer 20

Remainderman

Question 21

If no 3rd party is named as remainderman, when a life estate owner dies, the property reverts to the ….

Answer 21

grantor.

Question 22

What are the 2 different types of life estates?

Answer 22

1.) Conventional Life Estate
2.) Legal Life Estate

Question 23

• An estate created by the grantor that is based on the life of the life tenant OR the life of another
• pur autre vie

Answer 23

Conventional Life Estate

Question 23

Describes a life estate that grants 1 party ownership of a property for the duration of another individual’s life

Answer 23

Pur Autre Vie

Question 23

An estate created by state statute

Answer 23

Legal life estate

Question 23

• 1 party owns the property, but someone else lives there
• Evidenced by a lease

Answer 23

Leasehold Estates

Question 24

The tenant’s right of possession continues until the lease has expired

Answer 24

Leasehold estates

Question 25

Possession of the property reverts back to the landlord after the lease term has expired

Answer 25

Reversionary right

Question 26

The landlord’s interest in the property is specifically known as a….

Answer 26

“leased fee estate plus reversionary right”

Question 27

The tenant who leases real property has a _________ interest in the property.

Answer 27

leasehold

Question 28

The landlord has a ________ ___ _______ in the property that they own.

Answer 28

leased fee interest

Question 29

What are the 4 types of leasehold estates?

Answer 29

1.) Estate for Years
2.) Periodic Estate
3.) Estate at Will
4.) Tenancy at Sufferance