Real property

Question 1

3. Zoning authority comes about through
   a. police powers of the municipalities.
   b. the Alabama Constitution.
   c. delegation of state powers to the cities.
   d. the social contract between citizens and their government.

Answer 1

3. c. The answer is delegation of state powers to the cities. Zoning is not a police power.

Question 2

5. The owner of a house wants to fence the yard for her dog. When the fence is erected, the fencing materials are converted to real estate by
   a. annexation.
   b. severance.
   c. immobility.
   d. indestructibility.

Answer 2

5. a. The answer is annexation. Annexation is the opposite of severance. Personal property (fencing) is converted to real estate once it is permanently attached or annexed to the land.

Question 3

6. An Alabama surgeon and his wife wish to purchase a home and hold title in a manner that protects the marital home in case the husband is sued for malpractice. Which form of ownership will allow them to do this?
   a. Joint tenants with right of survivorship
   b. Tenants in common
   c. Tenants by the entireties
   d. Tenants in common with right of survivorship

Answer 3

6. d. The answer is tenants in common with right of survivorship. This is an asset protection tool that prevents jointly held property from being sold by a creditor of only one owner. Joint tenancy with right of survivorship is automatically destroyed and degraded to a tenancy in common if a creditor levies on the debtor’s interest. Property held as tenants in common can be sold under execution, the judgment debtor’s percentage of the proceeds retained by the creditor, and the innocent party’s portion of the proceeds remitted to the innocent party. Alabama does not recognize tenancy by the entireties.

Question 4

10. Rights or privileges that are connected with real property are
    a. improvements.
    b. appurtenances.
    c. not conveyed with the real estate.
    d. restricted to air and water rights.

Answer 4

10. b. The answer is appurtenances. Appurtenances are rights or privileges associated with the property and generally convey with the sale.

Question 5

15. A buyer took delivery of the deed to his new house but did not record the deed or take possession of the property. Under these circumstances, the
    a. buyer’s interest is not fully protected against third parties.
    b. transfer of the property from the seller is ineffective.
    c. deed is invalid after 90 days.
    d. deed is invalid after six months.

Answer 5

15. a. The answer is buyer’s interest is not fully protected against third parties. Constructive notice to the public of interest in a parcel of real estate is served when the deed is recorded and physical possession of the property is taken. Without this, an owner’s interests could be jeopardized.

Question 6

19. What document protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions?
    a. Abstract of title
    b. Title insurance policy
    c. Certificate of title
    d. Chain of title

Answer 6

19. b. The answer is title insurance policy. A title insurance policy is a contract under which the policyholder is protected from losses arising from defects in the title. An abstract of title is a historical summary report of what the title search found in the public record. A certificate of title is based upon a title search and certifies the condition of the title on the date the certificate is issued. A chain of title is the record of a property’s ownership. Although a certificate of title is used as evidence of ownership, it is not perfect against unrecorded liens or hidden defects. A title insurance policy protects the policyholder from title defects.

Question 7

21. A person owned a parcel of land. Subsequent to the owner’s death, the probate court determined the distribution of the land in accordance with the state’s statutes. This process is called
    a. escheat.
    b. condemnation.
    c. adverse possession.
    d. probate.

Answer 7

21. d. The answer is probate. Probate is a formal judicious process whose purpose is to see that the assets are distributed correctly. Probate courts distribute assets according to statute only when no other reasonable alternative, such as a valid will, exists.

Question 8

33. A developer grants a local power company the right to install necessary transmission lines. This right is an example of
    a. a license.
    b. an easement by prescription.
    c. an easement in gross.
    d. a conditional use permit.

Answer 8

33. c. The answer is an easement in gross. Utility easements are rights to use someone else’s land and are called easements in gross.

Question 9

48. An unmarried woman owns a $475,000 mansion. What is the total maximum amount of her home¬stead exemption?
    a. $2,000
    b. $4,750
    c. $237,500
    d. $475,000

Answer 9

48. a. The answer is $2,000. The tax appraised value of the home may be reduced by $2,000, Alabama’s homestead exemption.

Question 10

50. Under the Torrens system,
    a. title passes when the grantee’s application for registration has been approved and the real estate has been registered.
    b. the Torrens official performs exactly the same functions as the recorder of deeds.
    c. the original deed is mailed to the buyer after it has been registered.
    d. the registration of a title can be canceled by the owner at any time.

Answer 10

50. a. The answer is title passes when the grantee’s application for registration has been approved and the real estate has been registered. Under the Torrens system, the applicant needs to prove ownership. Then the court enters an order to register the real estate, and the registrar of titles issues a certificate of title. A person acquires title only when it is registered.

Question 11

53. Title insurance would cover all of the following hidden defects discovered after closing and not listed on the title commitment EXCEPT
    a. an incorrect legal description.
    b. a wrong name on a recorded deed.
    c. a claim to ownership by the spouse of a former owner.
    d. a recorded mortgage satisfaction document.

Answer 11

53. d. The answer is a recorded mortgage satisfaction document. A recorded mortgage satisfaction document is a public notice, not a hidden defect. Title problems occur when there is a hidden mistake in a prior deed, will, mortgage, or other document that may give someone else a valid legal claim against a property. An incorrect legal description, wrong name on a recorded deed, or a claim to ownership by the spouse of a former owner could be hidden defects in title to a property.

Question 12

59. Louisa has operated a neighborhood grocery store for the last 25 years. Her store is the only retail property in the area that is zoned residential. The store is an example of a(n)
    a. illegal enterprise.
    b. violation of the zoning laws.
    c. nonconforming use.
    d. variance of the zoning laws.

Answer 12

59. c. The answer is nonconforming use. A nonconforming use is the legal use that existed prior to current zoning ordinances but no longer conforms to current zoning laws. The grocery store operated prior to current zoning ordinances and is legally permitted to operate as a nonconforming use. A variance is permission for a use expressly prohibited by zoning ordinances.

Question 13

83. A man conveys the ownership of his house to his mother and stipulates that upon her death he will recapture ownership. The interest the man has in the property is a
    a. remainder interest.
    b. curtesy estate.
    c. legal life estate.
    d. reversionary interest.

Answer 13

83. d. The answer is reversionary interest. The man’s future interest in the fee simple estate is called the reversionary interest because ownership will revert to the original owner when the life estate ends.

Question 14

85. Grantee is to a deed as devisee is to a
    a. trust.
    b. estate.
    c. leasehold.
    d. will.

Answer 14

85. d. The answer is will. A grantee is the person to whom the property is conveyed. A person who receives property by will is a devisee.

Question 15

86. The clause in the deed that conveys the rights and privileges of ownership is called the
    a. habendum clause.
    b. granting clause.
    c. appurtenance clause.
    d. acknowledgment.

Answer 15

86. b. The answer is granting clause. The granting clause states the grantor’s intention to convey the property. The habendum clause defines the ownership.

Question 16

87. The type of title insurance that will protect the owner and heirs is called
    a. a lender’s policy.
    b. a leasehold policy.
    c. an owner’s policy.
    d. a certificate of sale policy.

Answer 16

87. c. The answer is an owner’s policy. An owner’s policy is issued for the benefit of owners and their heirs, unlike the lender’s policy, which is issued for the mortgage company.

Question 17

88. For land to be taken by the government under its right of eminent domain, which of the following must apply?
    a. There must be a statutory dedication.
    b. This must be an adverse action.
    c. There must be constructive notice.
    d. The taking must be for a public purpose.

Answer 17

88. d. The answer is the taking must be for a public purpose. Under the right of eminent domain, the government can acquire privately owned real estate for public use, which is defined very broadly.

Question 18

89. Tenancy with survivorship means
    a. the tenancy interest will be inherited.
    b. the tenant’s heirs are survivors.
    c. the tenancy interest will pass to the surviving tenant(s) upon the death of one party.
    d. this is not a legal tenancy.

Answer 18

89. c. The answer is the tenancy interest will pass to the surviving tenant(s) upon the death of one party. Tenancy with survivorship, or joint tenancy, means that the ownership of a deceased tenant remains with the surviving joint tenant or tenants

Question 19

91. The type of real estate ownership that is MOST all-inclusive is a
    a. life estate.
    b. conditional fee estate.
    c. fee simple estate.
    d. reversionary interest.

Answer 19

91. c. The answer is fee simple estate. An estate in fee simple is the highest interest in real estate recognized by law. Fee simple ownership is absolute ownership: the holder is entitled to all rights to the property.

Question 20

95. After real estate has been sold by the state or county to satisfy a delinquent tax lien, defaulted owners usually have a right to
    a. have the sale canceled by paying the back taxes and penalties.
    b. redeem the property within the time specified by law.
    c. pay their creditors directly and have their liens removed.
    d. record a notice of nonresponsibility for the unpaid taxes.

Answer 20

95. b. The answer is redeem the property within the time specified by law. Generally, a delinquent taxpayer can redeem the property before the tax sale. This right is known as the equitable right of redemption.

Question 21

98. The seller conveyed a quitclaim deed to the buyer. Upon receipt of the deed, the buyer may be certain that
    a. the seller owned the property.
    b. there are no encumbrances against the property.
    c. the buyer now owns the property subject to certain claims of the seller.
    d. all of the seller’s interest in the property, if any, belongs to the buyer.

Answer 21

98. d. The answer is all of the seller’s interest in the property, if any, belongs to the buyer. The quitclaim deed offers no covenants or warranties, only that the grantor “remises, releases, and quitclaims” interest in the property, if any.

Question 22

99. In a land trust, which of the following is FALSE?
    a. Public records list all the beneficiaries.
    b. Beneficial interest can be transferred by assignment.
    c. The beneficiary is usually the trustor.
    d. The property can be pledged as security for a loan without recording a mortgage.

Answer 22

99. a. The answer is public records list all the beneficiaries. One of the distinguishing characteristics of a land trust is that the public records usually do not name the beneficiary or beneficiaries.

Question 23

104. Because a couple no longer needs their large house, they decide to sell it and move into a cooperative apartment building. In a cooperative, they will
     a. own their individual apartment.
     b. become shareholders in a corporation.
     c. own the common elements.
     d. receive a 20-year lease to their apartment.

Answer 23

104. b. The answer is become shareholders in a corporation. In a cooperative, a corporation holds title to the land and building and offers shares of stock.

Question 24

106. Elizabeth grants a parcel of land to her church for as long as the parcel is used for religious purposes. The church’s ownership rights to the parcel constitute a
     a. fee simple defeasible estate.
     b. fee simple absolute estate.
     c. life estate.
     d. leasehold estate.

Answer 24

106. a. The answer is fee simple defeasible estate. The religious organization’s ownership of the land is qualified by the limitation that the land be used for religious purposes. The limitation creates a fee simple defeasible or qualified fee estate. If the religious organization decides to use the property for some other purpose, title to the property may revert back to the woman or her heirs. A fee simple absolute estate is the highest form of real estate ownership. A life estate is limited to the life of the estate owner or some other designated person. A leasehold estate is an estate of possession only granted from the property owner to a tenant and lasts for a fixed period of time.

Question 25

109. If the Jeffersons move into a cooperative apartment building they will
     a. become shareholders in a corporation.
     b. own and finance their individual apartment.
     c. have fee simple title to unit.
     d. receive a 20-year lease to their apartment.

Answer 25

109. a. The answer is become shareholders in a corporation. In a cooperative, a corporation holds title to the land and building and offers shares of stock to inhabitants of the cooperative’s units. Owners in a cooperative occupy their units through proprietary leases, and their interests are treated as personal property. If the couple were to move to a condominium complex, they would own and finance their individual unit. Condominium ownership provides fee simple title to each individual unit while a cooperative is ownership in the corporation which owns the property.

Question 26

113. The town of Meadowvale enacts a new zoning code. Under the new code, commercial buildings are not permitted within 1,000 feet of Robin Lake. A commercial building built years before on the lakeshore but permitted to continue in its former use operates as a(n)
     a. variance.
     b. nonconforming use.
     c. special use.
     d. adverse possession.

Answer 26

113. b. The answer is nonconforming use. Nonconforming use permits allow uses existing before zoning restrictions were enacted prohibiting those uses. A municipality may allow the uses to continue for a specified length of time and with a limited right of transfer to later buyers. A variance is permission for a property use expressly prohibited by zoning ordinances. A special use or conditional use is permission to use a property for a related but nonconforming use for the public good. Adverse possession is not related to zoning issues but refers to the open, hostile, and continuous possession of another’s property.

Question 27

114. A primary feature of property held in joint tenancy is that
     a. there is always right of survivorship.
     b. a maximum of two people can own the real estate.
     c. the fractional interests of the owners can be different.
     d. additional owners may be added later.

Answer 27

114. a. The answer is there is always right of survivorship. Right of survivorship is the distinctive feature of joint tenancy. Any number of persons can own a property in joint tenancy—providing they all have equal shares and identical interests, come into ownership at the same moment and on the same granting document, and have equal rights of possession.

Question 28

115. A man allows his neighbor to store her camper in his yard for a few weeks until he needs the space. The man does not charge his neighbor rent for the use of his yard. The man has given his neighbor
     a. an easement appurtenant.
     b. an easement by necessity.
     c. an estate in land.
     d. a license.

Answer 28

115. d. The answer is a license. A license is a personal privilege to enter the land of another for a specific purpose, and the right is given orally or informally.

Question 29

116. A woman conveys a life estate to her grandson and stipulates that upon her death the estate will pass to her son-in-law. The son-in-law has
     a. a reversionary interest.
     b. an estate for years.
     c. a remainder interest.
     d. a legal life estate.

Answer 29

116. c. The answer is a remainder interest. When a life estate ends, it is replaced by a fee simple estate. The future interest the woman’s son-in-law has in the fee simple estate that will convey to him when the life estate ends is called a remainder interest.

Question 30

117. In a limited partnership,
     a. the general partners run the business.
     b. the number of investors is limited to 10.
     c. all the partners participate in running the business.
     d. investors may participate with only a small amount of capital but with unlimited liability.

Answer 30

117. a. The answer is the general partners run the business. In a limited partnership, the limited partners are not legally permitted to participate and can individually be held liable for losses only to the extent of their investment.

Question 31

119. An owner divides a parcel into several lots, one of which is completely surrounded by other lots and has no street access. Which of the following is TRUE?
     a. The municipality must construct a street to create access.
     b. The owner must create an easement by condemnation to provide access.
     d. An easement by prescription should be granted.
     d. An easement by necessity should be created for the landlocked parcel.

Answer 31

119. d. The answer is an easement by necessity should be created for the landlocked

Question 32

124. Normally, the priority of general liens is determined by the
     a. order in which the cause of action arose.
     b. size of the claim.
     c. court.
     d. order in which they are filed or recorded.

Answer 32

124. d. The answer is order in which they are filed or recorded. The general rule for priority of liens is first come, first served, with the exception of taxes and assessments, which usually take priority over other liens.

Question 33

127. A woman owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective lot purchaser?
     a. Appurtenant easement
     b. Easement in gross
     c. Easement by necessity
     d. License

Answer 33

127. a. The answer is appurtenant easement. An appurtenant easement is annexed to the ownership of one parcel and allows the owner use of the neighbor’s land. The easement transfers with the title and so provides the greatest protection for a prospective purchaser.

Question 34

128. A contractor performed his last work on September 15, 2014. The contractor may file his lien affidavit at any time on or before
     a. October 15, 2014.
     b. September 15, 2014.
     c. December 31, 2014.
     d. March 15, 2015.

Answer 34

128. d. The answer is March 15, 2015. A mechanic’s lien is enforced by a suit filed within six months of the payment due date and the date of recording the affidavit of lien.

Question 35

129. Jamal and Tina bought a store building and took title as joint tenants. Tina died testate. Jamal now owns the store
     a. as a joint tenant with rights of survivorship.
     b. in severalty.
     c. as a tenant in common with the dead woman’s heirs.
     d. in trust.

Answer 35

129. b. The answer is in severalty. Joint tenancy includes the right to survivorship, to the property passing to the other owner(s) upon the death of one tenant. In this case, Jamal and Tina took title as joint tenants, meaning that upon one’s death, there is only one owner who owns the property in severalty. In a tenancy in common, the owners own an undivided fractional interest in the property and that interest is passed on according to the owner’s will, to heirs, or to a trust.

Question 36

131. Which of the following is a voluntary alienation of the property?
     a. Adverse possession
     b. Condemnation
     c. Foreclosure
     d. Owner sale

Answer 36

131. d. The answer is owner sale. Voluntary alienation is the legal term for the voluntary transfer of title, such as when the owner sells the property.

Question 37

134. A trust that is established after the death of the owner is called a
     a. testamentary trust.
     b. trust by will.
     c. beneficial trust.
     d. living trust.

Answer 37

134. a. The answer is testamentary trust. A trust established by will after the owner’s death is called a testamentary trust, as opposed to a trust created by agreement during the owner’s lifetime, which is called a living trust.

Question 38

136. What type of lien arises as a result of a judgment, estate or inheritance taxes, a decedent’s debts, or federal taxes?
     a. Specific
     b. Voluntary
     c. Equitable
     d. General

Answer 38

136. d. The answer is general. Each creates a general lien—a claim against all the personal and real property of the debtor.

Question 39

140. Which of the following is an example of a legal life estate?
     a. Estate conveyed by one party to a second party for the life of the second party
     b. Use of a will to convey property
     c. Homestead estate
     d. Estate conveyed to a second party subject to a condition

Answer 39

140. c. The answer is homestead estate. Legal life estates, such as a homestead estate, are not created voluntarily by an owner but are established by state law.

Question 40

10. In which of the following situations could a quitclaim deed NOT be used?
    a. To convey title
    b. To release a nominal real estate interest
    c. To warrant that a title is valid
    d. To remove a cloud on title

Answer 40

10. c. The answer is to warrant that a title is valid. The quitclaim deed carries no covenants or warranties. It is used to convey less than a fee simple estate or to cure a cloud on the title.

Question 41

12. General real estate taxes are also called
    a. special assessments.
    b. ad valorem taxes.
    c. appropriation funds.
    d. general, voluntary liens.

Answer 41

12. b. The answer is ad valorem taxes. General real estate taxes are based on the value of the property being taxed and are called ad valorem (according to value) taxes. They are specific, involuntary liens.

Question 42

19. What is the term for a deed that contains no express warranties?
    a. A bargain and sale deed
    b. A quitclaim deed
    c. A warranty deed
    d. A deed of trust

Answer 42

19. b. The answer is a quitclaim deed. A quitclaim deed provides the grantee with the least protection of any deed, as it carries no covenants or warranties. The bargain and sale deed contains no express warranties against encumbrances but does imply that the grantor holds title and possession. A warranty deed fully warrants good clear title to a property. A deed of trust is used to create a lien for a loan.

Question 43

21. Which of the following is the year-lengths of the different adverse possession time periods in Alabama?
    a. 10, 5
    b. 20, 10
    c. 20, 10, 5
    d. 20, 10, 3

Answer 43

21. d. The answer is 20, 10, 3. The relevant adverse possession time periods are 20 years for what we commonly call squatting, 10 years for persons with color of title or in the case of a boundary line dispute, and 3 years after receipt of a tax deed if the tax sale was initially void.

Question 44

28. In a situation where a homeowner conveys property to her uncle with a deed, and then the uncle records the dead, when did title to the property actually transfer or pass to the uncle?
    a. Upon delivery and acceptance of the contract
    b. Upon recording of the deed
    c. Upon delivery and acceptance of the deed
    d. Upon the delivery of consideration

Answer 44

28. c. The answer is upon delivery and acceptance of the deed. Title is transferred upon delivery and acceptance of the deed. At that moment, the deed is binding between the parties. When the uncle later records the deed, he is then protected against claims of third parties. Contracts do not transfer title. A valid deed must contain a clause acknowledging that the grantor has received consideration, but the consideration in itself does not transfer the title to the property.

Question 45

35. Gretchen is a widow with no children who owns property that she devises by her will to her favorite niece. After Gretchen dies, when will full title and possession of the property pass to her niece?
    a. Immediately upon the widow’s death
    b. After the widow’s will has been probated
    c. After the niece has paid all inheritance taxes
    d. When the niece executes a new deed to the property

Answer 45

35. b. The answer is after the widow’s will has been probated. While legally the ownership of the property passes to the niece upon the widow’s death, full title and possession of the property requires probate. Probate is a legal proceeding verifying the validity of a will and accounting for the decedent’s assets.

Question 46

37. An involuntary encumbrance to secure payment to a general contractor is a lien on
    a. all property of the debtor in the county where filed.
    b. the property improved by the general contractor’s services.
    c. all property of the debtor in his or her home county.
    d. only the homestead exemption of the debtor.

Answer 46

37. b. The answer is the property improved by the general contractor’s services. The theory is that the general contractor’s labor improved the value of specific property, so the contractor is entitled to a lien on that particular property. It is an involuntary encumbrance, meaning it arises by operation of the law, not because of any agreement of the parties to grant an encumbrance.

Question 47

38. All of the following are subject to real property ownership rights EXCEPT
    a. buildings located on the land.
    b. air space above the land.
    c. easements running with the land.
    d. navigable rivers running through the land.

Answer 47

38. d. The answer is navigable rivers running through the land. Navigable rivers are considered public highways with the state holding title to the submerged land.

Question 48

39. A homestead exemption protects against judgments
    a. resulting from unpaid taxes.
    b. from foreclosure of a mortgage.
    c. of unsecured creditors.
    d. that result from the costs of improvements.

Answer 48

39. c. The answer is of unsecured creditors. A portion of the area or value of the property occupied as the family home is exempt from unsecured debts, but not debt secured by the property.

Question 49

45. Rachel and June own a property together. Rachel dies and June now owns the property with Rachel’s heirs. In this situation, Rachel and June owned the property
    a. as joint tenants.
    b. as tenants in common.
    c. as shareholders in their own corporation.
    d. by entirety.

Answer 49

45. b. The answer is as tenants in common. Under tenancy in common, when a co-tenant dies, the tenant’s undivided interest passes according to the will. In this case, either the deceased owner died intestate and the state law of decent gave her interest to her heirs or she willed her undivided interest in the property to her heirs. In a joint tenancy, if one of the women died, the other would enjoy the right of survivorship and own the property in severalty. If the two original owners had formed a corporation to own the property, the death of one would not affect title to the property, which would belong to the corporation. Only married couples are allowed to own property as tenants by the entirety and the question did not state the women were married.

Question 50

49. The rights of ownership of real property include all of the following EXCEPT
    a. disposition.
    b. compatibility.
    c. exclusion.
    d. control.

Answer 50

49. b. The answer is compatibility. The bundle of legal rights includes possession, control, enjoyment, exclusion, and deposition, but not compatibility.

Question 51

51. Which of the following is an example of involuntary alienation?
    a. Having a piece of land sold for delinquent taxes
    b. Selling a property to pay off debts
    c. Giving a piece of land to the zoo
    d. Letting another person plant crops on an unused portion of a piece of land

Answer 51

51. a. The answer is having a piece of land sold for delinquent taxes. Title to property transferred without the owner’s consent, known as involuntary alienation, is usually carried out by operation of law and can include having the property sold to satisfy delinquent taxes.

Question 52

52. A condominium community has a swimming pool, tennis courts, and a biking trail. These facilities are MOST likely owned by the
    a. condominium board.
    b. corporation in which the unit owners hold stock.
    c. unit owners in the form of percentage undivided interests.
    d. unit owners in the form of proportional divided interests.

Answer 52

52. c. The answer is unit owners in the form of percentage undivided interests. Common areas, including amenities such as swimming, biking, and tennis areas, are owned by the unit owners in undivided percentage interests as tenants in common.

Question 53

53. Which of the following statements about general lien and a specific lien is TRUE?
    a. A specific lien is held by one person, while a general lien is held by at least two people.
    b. A general lien cannot be enforced in court, while a specific lien can be enforced.
    c. A general lien affects all of a debtor’s property, while a specific lien affects only a certain piece of property.
    d. A specific lien covers real estate, while a general lien covers personal property.

Answer 53

53. c. The answer is a general lien affects all of a debtor’s property, while a specific lien affects only a certain piece of property. A general lien affects all of a debtor’s property, both real and personal. A specific lien affects only a particular piece of real or personal property. Both general and specific liens may be enforced in court.

Question 54

55. A father conveyed the family home to his daughter by will as a pur autre vie estate for the life of her mother. If the daughter should die before the mother, who gains possession of the property?
    a. Remainderman
    b. Mother
    c. Father’s other children
    d. Daughter’s heirs

Answer 54

55. d. The answer is daughter’s heirs. A life estate based on the lifetime of a person other than the life tenant is called an estate pur autre vie. The daughter is the life tenant, but the measuring life is the mother’s. The daughter’s heirs will inherit the daughter’s life estate, but it will end when the mother dies.

Question 55

59. All of the following are requirements for acquiring ownership of property by adverse possession EXCEPT
    a. the person in possession must compensate the owner.
    b. occupancy of the property must be without the owner’s consent.
    c. occupancy must be continuous and over a specified period of time.
    d. the person in possession must occupy the property openly rather than secretly.

Answer 55

59. a. The answer is the person in possession must compensate the owner. The law recognizes that the use of land is an important function of its ownership, and to claim adverse possession, the possession by the claimant must usually be all of the following: open, notorious, continuous, hostile, and adverse. There is no requirement of compensation; however, some states require that the adverse possessor pay the property taxes.

Question 56

61. Which of the following is NOT a test to identify a fixture?
    a. Intent of the parties
    b. Method of attachment of the item
    c. Size of the item
    d. Adaptation of the item to the real estate

Answer 56

61. c. The answer is size of the item. The overall test to identify a fixture is intent, which is determined by method of attachment, adaptation, or agreement.

Question 57

65. A woman held fee simple title to a vacant lot adjacent to a business. She was persuaded to make the lot available to the business. She had her attorney prepare a deed that conveyed ownership of the lot to the business “so long as it is used for commercial purposes.” After the completion of the gift, the business will own a
    a. life estate.
    b. tenancy for years.
    c. periodic tenancy.
    d. determinable fee estate.

Answer 57

65. d. The answer is determinable fee estate. The words “so long as” create a fee simple determinable that limits use of the property for commercial purposes. The former owner retains the possibility of reverter.

Question 58

73. Which statement is TRUE regarding a special warranty deed?
    a. The grantor is making additional warranties beyond those given in a warranty deed.
    b. The grantor retains an interest in the ownership.
    c. The grantor is warranting that no encumbrances exist against the property.
    d. The grantor’s warranties are limited to the time the grantor owned the property.

Answer 58

73. d. The answer is the grantor’s warranties are limited to the time the grantor owned the property. A special warranty deed contains two basic warranties: that the grantor received title and that the property was not encumbered during the time the grantor held title, except as noted in the deed.

Question 59

74. The term improvements, when referring to real estate, includes
    a. shrubbery.
    b. trees.
    c. lawns.
    d. sidewalks.

Answer 59

74. d. The answer is sidewalks. An improvement is an artificial thing attached to the land. A sidewalk is a man-made addition.

Question 60

76. A bill of sale is used to transfer the ownership of
    a. real property.
    b. fixtures.
    c. appurtenances.
    d. personal property.

Answer 60

76. d. The answer is personal property. Personal property is conveyed by a bill of sale, while real property is conveyed by deed.

Question 61

82. A person wants to ensure that the ownership of real property can be willed to her children. Which form of ownership would the person want?
    a. Conventional life estate
    b. Joint tenancy
    c. Fee simple estate
    d. License

Answer 61

82. c. The answer is fee simple estate. A fee simple estate is of unlimited duration and passes to the owner’s heirs.

Question 62

83. A suit to quiet title refers to
    a. a title insurance company’s search of the title.
    b. a mortgagor relinquishing title after foreclosure.
    c. the removal of a cloud on the title by court action.
    d. the deposit of a title with an escrow agent.

Answer 62

83. c. The answer is the removal of a cloud on the title by court action. If there is a gap in the ownership chain, then this cloud on the title makes it necessary to establish ownership by court action. This is called a suit to quiet title.

Question 63

88. Olivia conveys property to Nicholas with a deed. Nicholas then recorded the deed. When did title to the property actually transfer to Nicholas?
    a. Upon delivery and acceptance of the contract
    b. Upon delivery and acceptance of the deed
    c. Upon recording of the deed
    d. Upon the delivery of consideration

Answer 63

88. b. The answer is upon delivery and acceptance of the deed. Title is transferred upon delivery and acceptance of the deed. At that moment, the deed is binding between the parties. When the nephew later records the deed, he is then protected against claims of third parties. Contracts do not transfer title. A valid deed must contain a clause acknowledging that the grantor has received consideration, but the consideration in itself does not transfer the title to the property.

Question 64

94. All of the following are generally exempt from paying real estate taxes EXCEPT
    a. municipal government.
    b. charitable hospital.
    c. private not-for-profit school.
    d. for-profit assisted living facility.

Answer 64

94. d. The answer is for-profit assisted living facility. Most state laws exempt property from real estate taxation if used for tax-exempt purposes. A for-profit entity would generally not qualify for this exemption.

Question 65

99. The type of deed in which the granting clause states “grant, bargain, and sell” is a
    a. special warranty deed.
    b. general warranty deed.
    c. reconveyance deed.
    d. bargain and sale deed.

Answer 65

99. d. The answer is bargain and sale deed. A bargain and sale deed contains no express warranties but implies that the grantor holds title and possession. The granting clause usually contains the phrase “grant, bargain, and sell.”

Question 66

100. When grantors do NOT wish to convey certain property rights, they
     a. must note the exceptions in a separate document.
     b. may not do so because the deed conveys the entire premises.
     c. may note the exceptions in the deed of conveyance.
     d. must convey the entire premises and have the grantee reconvey the rights to be retained by the grantor.

Answer 66

100. c. The answer is may note the exceptions in the deed of conveyance. If the grantors convey less than their complete interest, the wording in the granting clause must indicate this limitation. Mineral rights, water rights, and easements are frequently retained by grantors.

Question 67

102. Which of the following statements about the covenant of quiet enjoyment is TRUE?
     a. The grantor ensures that the title will be good against the title claims of third parties.
     b. The grantor guarantees that if the title fails in the future, he or she will compensate the grantee.
     c. The grantor warrants that he or she is the owner and has the right to convey title to the property.
     d. The grantor promises to obtain and deliver any instrument needed to make the title good.

Answer 67

102. a. The answer is the grantor ensures that the title will be good against the title claims of third parties. Quiet enjoyment means freedom from any claims to the title by third parties, persons other than grantor and grantee. The other guarantees and promises are warranted through the covenants of warranty forever, seisin, and further assurance. A general warranty deed provides all of these covenants.

Question 68

104. The type of deed in which the granting clause states “remise, release, alienate, and convey” is a
     a. bargain and sale deed.
     b. quitclaim deed.
     c. special warranty deed.
     d. sheriff’s deed.

Answer 68

104. c. The answer is special warranty deed. In a special warranty deed, the grantors defend the title against themselves. The words usually contained in the granting clause are “remise, release, alienate, and convey.”

Question 69

106. A man has defaulted in the payment of several of his debts, and the court has ordered his property sold to satisfy his obligations. A title search revealed several outstanding liens against the property to be sold. Which of the following liens has highest priority?
     a. Outstanding first mortgage lien dated and recorded one year ago
     b. Real estate tax lien for the current year
     c. Judgment lien rendered and recorded last month
     d. Mechanic’s lien for work started two months before the mortgage was recorded

Answer 69

106. b. The answer is real estate tax lien for the current year. Tax liens usually have priority over previously recorded liens.

Question 70

107. When a mortgage loan has been paid in full, it is important for the borrower to be sure that
     a. the paid note is placed in a safe deposit box.
     b. they obtain a deed of partial reconveyance.
     c. a satisfaction of mortgage is recorded.
     d. the paid mortgage is returned to the lender.

Answer 70

107. c. The answer is a satisfaction of mortgage is recorded. Satisfaction of mortgage needs to be recorded in the public record to show that a mortgage debt is no longer a lien on the property.

Question 71

111. A woman bought acreage but never saw it and did not use it; although, she regularly paid the real estate taxes on it. Without her knowledge, a man moved his mobile home onto the property, drilled a well for water, and lived there for many years. The man may have become the owner of the acreage if he complied with state laws regarding
     a. intestate succession.
     b. adverse possession.
     c. the statute of frauds.
     d. the statute of limitations.

Answer 71

111. b. The answer is adverse possession. If possession by the man in his mobile home has been open, notorious, continuous, hostile, and adverse, there must be proof of such for a statutorily prescribed period. State law may also require that the occupant pay property taxes, which is one warning sign to an absentee owner that should warrant investigation

Question 72

112. The date and time a document was recorded in the public records helps to establish which of the following?
     a. Abstract of title
     b. Alienation clause
     c. Marketable title
     d. Priority of mortgages and liens

Answer 72

112. d. The answer is priority of mortgages and liens. The priority of mortgages and other liens normally is determined by the order in which they were recorded. Time of recordation is an important consideration in establishing the priority of claims in the event of a sale. An abstract of title is a document prepared to report the results of a title search. An alienation clause is used in a mortgage or deed of trust to allow the full amount due to be called if the buyer is in default. Marketable title is established with an abstract or title commitment.

Question 73

115. Which of the following is TRUE of condominium ownership?
     a. The individual units cannot be mortgaged.
     b. The corporation pays the real estate taxes.
     c. The ownership cannot be willed.
     d. An owner’s interest in the limited common elements cannot be sold separately.

Answer 73

115. d. The answer is an owner’s interest in the limited common elements cannot be sold separately. Although an individual unit owner owns the common elements as a tenant in common, state laws usually provide that unit owners do not have the same right to partition as other tenants in common.

Question 74

117. A document that protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions, is called
     a. a chain of title.
     b. an abstract of title.
     c. a certificate of title.
     d. a title insurance policy.

Answer 74

117. d. The answer is a title insurance policy. Although a certificate of title is used as evidence of ownership, it is not perfect against unrecorded liens or hidden defects. A title insurance policy protects the policyholder from title defects.

Question 75

118. Which of the following is a lien on real estate?
     a. Easement
     b. Recorded mortgage
     c. Encroachment
     d. Restrictive covenant

Answer 75

118. b. The answer is recorded mortgage. A recorded mortgage is a lien on real estate. Easements, encroachments, and restrictive covenants are all encumbrances, not liens.

Question 76

119. Arun and Ben are joint tenants. Ben sells his interest to George. What is the relationship of Arun and George?
     a. They are tenants in common.
     b. They are joint tenants.
     c. There is no relationship because Ben cannot sell to George.
     d. Arun owns a two-thirds interest and George owns a one-third interest.

Answer 76

119. a. The answer is they are tenants in common. When joint tenants sell their interest in the jointly held property, the unities of time and title are destroyed. The new owner, George, becomes a tenant in common with Arun.

Question 77

125. Which of the following is defined as the historical records of all owners and encumbrances of a specific parcel of real estate?
     a. Title search
     b. Chain of title
     c. Title commitment
     d. Abstract of title

Answer 77

125. b. The answer is chain of title. A chain of title is the historical record of a property’s ownership and encumbrances. Each owner is linked to the next so that a chain is formed. A title search is the process of examining the chain of title for defects or errors. A title commitment lists current encumbrances and any defects found in the title upon completing the search. An abstract of title is a historical summary report of what the title search found in the public record; only when coupled with a title opinion can the buyer know if there are title issues.

Question 78

128. A man owned two acres of land. He sold one acre to a neighbor and reserved for himself an appurtenant easement over his neighbor’s land for ingress and egress. The man’s land
     a. is the servient tenement.
     b. is the dominant tenement.
     c. can be cleared of the easement when the man sells the withheld acre to a third party.
     d. is subject to an easement in gross.

Answer 78

128. b. The answer is is the dominant tenement. The man’s parcel benefits from the easement and is the dominant tenement. The neighbor’s tract, over which the easement runs, is the servient tenement.

Question 79

132. A person who acquired ownership that can be inherited, with the provision that the land must always be used for recreational purposes, has which of the following?
     a. Fee simple estate
     b. Fee estate subject to condition subsequent
     c. Restricted estate
     d. Estate that cannot be sold

Answer 79

132. b. The answer is fee estate subject to condition subsequent. A fee simple defeasible is a qualified estate, and one type is subject to a condition subsequent. This means that the new owner must not perform some action or activity

Question 80

136. A property owner contracted to have a swimming pool installed on her property. When the pool was completed, she refused to pay for the improvement, and the contractor filed a lien for nonpayment. This lien was MOST likely a
     a. general lien.
     b. special lien.
     c. voluntary lien.
     d. specific lien.

Answer 80

136. d. The answer is specific lien. The lien filed by the contractor would be a mechanic’s lien and would be a specific, involuntary lien on the property.

Question 81

138. Claire has just made the final payment to her lender for her home’s mortgage. However, a lien on her property will remain until the lender records a(n)
     a. satisfaction of mortgage.
     b. reconveyance of mortgage.
     c. alienation of mortgage.
     d. reversion of mortgage.

Answer 81

138. a. The answer is satisfaction of mortgage. A satisfaction of mortgage, also known as a release or discharge, is executed by the lender when a note has been fully paid. This document returns to the borrower all ownership interest in the real estate originally conveyed to the lender. This release must be recorded in the public record to show that the debt has been removed from the property.

Question 82

2. The road to a man’s home is winding and long, and the shorter, more direct route is across a neighbor’s land. The man has used the more direct route for years and has never seen the neighbor. He hopes to eventually gain an easement by
   a. necessity.
   b. condemnation.
   c. license.
   d. prescription.

Answer 82

2. d. The answer is prescription. If the man’s use of the land is visible and open, and if the owner must have been able to learn of it, he may be able to acquire an easement by prescription, depending on the time period required by state law.

Question 83

3. Dianne owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots. Dianne also wants to retain control over the lake frontage while allowing lot owners to access the lake. Which right would provide the greatest protection for a prospective lot purchaser?
   a. Easement in gross
   b. Easement by necessity
   c. Appurtenant easement
   d. License

Answer 83

3. c. The answer is appurtenant easement. An appurtenant easement is attached to the ownership of one parcel and allows the owner use of the neighbor’s land. The easement transfers with the title and so provides the greatest protection for a prospective purchaser. An easement in gross is a company’s right to the use of another’s land. An easement by necessity is created by a court order. An easement by necessity is created when an owner sells a parcel of land that has no access to a street except over the seller’s remaining land. A license is a personal privilege to enter the land of another for a specific purpose. A license can be terminated or revoked at any time.

Question 84

5. A cooperative obtains the funds necessary to cover ongoing operating expenses and mortgage payments by
   a. charging rent to each of the shareholders.
   b. selling the common elements.
   c. collecting regular assessments from shareholders.
   d. charging special assessments.

Answer 84

5. c. The answer is collecting regular assessments from shareholders. Funds for the budget are assessed to individual shareholders, generally in the form of monthly fees.

Question 85

6. Which of the following is an involuntary alienation of property?
   a. Quitclaim
   b. Inheritance
   c. Condemnation
   d. Gift

Answer 85

6. c. The answer is condemnation. Condemnation is an operation of the law that carries out an involuntary transfer (alienation).

Question 86

10. Eric and Benito are co-owners in fee simple of a small office building. Benito dies intestate and leaves nothing to be distributed to his heirs. Eric is neither related to Benito nor his creditor. What would explain how Eric acquired Benito’s interest in the office building?
    a. Reversionary rights
    b. Adverse possession
    c. Remainder interests
    d. Joint tenancy

Answer 86

10. d. The answer is joint tenancy. Upon the death of an owner in a joint tenancy, all remaining interests do not pass to the heirs of the deceased owner or according to the will but to the surviving joint tenant or tenants. Reversionary rights and remainder interests refer to the future right to an estate in real property. Adverse possession occurs when a person acquires title to another’s property by means of open, hostile, and continuous possession over time.

Question 87

12. An owner conveys a life estate to her grandson George and stipulates that on her death the estate will pass to her son-in-law Tomas. Tomas has a(n)
    a. reversionary interest.
    b. estate for years.
    c. remainder interest.
    d. legal life estate.

Answer 87

12. c. The answer is remainder interest. The owner’s death will end the life estate conveyed to her grandson, which will then mean the holder of the remainder interest, the son-in-law, will have fee simple absolute ownership of the property. An estate for years is a leasehold estate that continues for any definite period of time. A legal life estate is a freehold estate created out of a provision.

Question 88

14. If a property owner conveys a life estate to his sister for her lifetime and then designates his nephew as the person to whom the property will pass when the life estate ends, when the sister dies, what happens to the property?
    a. The property reverts back to the original property owner.
    b. The nephew automatically becomes the fee simple owner of the property.
    c. The property passes to the sister’s heirs.
    d. The property owner must designate a remainderman for the property.

Answer 88

14. b. The answer is the nephew automatically becomes the fee simple owner of the property. The property owner named his nephew as the remainderman, the one to whom the property would pass upon the death of his sister. On his sister’s death, the life estate ends, and the property automatically passes to the nephew. If the property owner does not choose a remainderman when conveying the life estate to his sister, ownership reverts back to the original property owner or to his or her heirs (or other individuals specified in the property owner’s will).

Question 89

19. What is the difference between a general lien and a specific lien?
    a. A general lien cannot be enforced in court, while a specific lien can be enforced.
    b. A general lien affects all of a debtor’s property, while a specific lien affects only a certain piece of property.
    c. A specific lien is held by one person, while a general lien is held by at least two persons.
    d. A specific lien covers real estate, while a general lien covers personal property.

Answer 89

19. b. The answer is a general lien affects all of a debtor’s property, while a specific lien affects only a certain piece of property. A general lien affects all of a debtor’s property, both real and personal. A specific lien affects only a particular property.

Question 90

25. A developer wishes to purchase the land on which an eight-unit condo complex once stood in Gulf Shores, but which was completely destroyed by a major hurricane. You need to obtain purchase contract(s) from
    a. the last known president of the condo association.
    b. the state of Alabama, because the land escheated.
    c. no one—this land cannot be purchased.
    d. all of the condo owners.

Answer 90

25. d. The answer is all of the condo owners. The condo owners own the land as tenants in common. Each condo owner held title to the interior space between their exterior walls, ceiling, and floor. Everything else is common area and is owned by them as tenants in common.

Question 91

37. How long is the post-tax sale administrative redemption period in Alabama?
    a. One year
    b. Two years
    c. Three years
    d. Four years

Answer 91

37. c. The answer is three years. Redemption periods might be much longer if the owner never relinquished possession of the property to the investor, but the administrative period is only three years. This is the time period during which redemption may be accomplished through county personnel. If any redemption rights still exist after the first three years, redemption must be negotiated directly with the investor via a process called judicial redemption.

Question 92

41. Owen tells his next door neighbor that she can store her camper in his yard for a few weeks until he needs the space. Owen does not charge the neighbor any rent for the use of his yard. Owen has given his neighbor a(n)
    a. easement by necessity.
    b. estate in land.
    c. license.
    d. easement appurtenant.

Answer 92

41. c. The answer is license. A license is a revocable personal privilege to use the land of another for a specific purpose, and the right is given orally or informally. The property owner’s permission does not grant the neighbor an easement or an estate in the land.

Question 93

44. The main purpose of police power is to
    a. demonstrate the authority of the state.
    b. set limits on the amount and kinds of businesses in a given area.
    c. protect residential neighborhoods from encroachment by business and industry.
    d. ensure the health, safety, and welfare of the community.

Answer 93

44. d. The answer is ensure the health, safety, and welfare of the community. Individual rights are subject to certain powers, one of which is police power: the power to preserve order, protect the public health and safety, and promote the general welfare of the community.

Question 94

46. The process by which government can acquire ownership of private land for public use is
    a. escheat.
    b. condemnation.
    c. eminent domain.
    d. doctrine of public acquisition.

Answer 94

46. b. The answer is condemnation. Condemnation is the process; eminent domain is the right of the government to acquire ownership of private land for public use.

Question 95

53. Alabama real estate taxes are assessed on _____ for the year in _____.
    a. October 1, arrears
    b. October 1, advance
    c. January 1, arrears
    d. January 1, advance

Answer 95

53. a. The answer is October 1, arrears. Taxes are assessed and due on October 1 of each year, for the prior 12-month period. They may be paid any time between October 1 and December 31 without penalty, but will become liable for penalties, expenses, and interest starting on January 1. This information is important when preparing an estimated settlement sheet for a buyer or seller because the contract often calls for proration of real estate taxes.

Question 96

54. In what way does a deed of trust differ from a mortgage?
    a. Obligation of the borrower to repay the funds
    b. Redemption rights allowed after foreclosure
    c. Number of parties involved in the loan
    d. Time period permitted to cure a default

Answer 96

54. c. The answer is number of parties involved in the loan. A deed of trust is a three-party instrument that conveys naked title to a third party, the trustee, who holds the title on behalf of the lender, also known as the beneficiary. The borrower is the trustor. A mortgage is a two-part instrument between the mortgagor and the mortgagee.

Question 97

60. In order for a deed to be valid, the
    a. signature of the grantee must be witnessed.
    b. deed must be recorded.
    c. grantee must sign the deed.
    d. grantor must be legally competent.

Answer 97

60. d. The answer is grantor must be legally competent. Competency of the grantor is one of the requirements for a valid deed. The grantor must be of lawful age and sound mind. Witnessing the grantee’s signature is never needed as the grantee does not sign the deed and recording a deed is not required for validity of the deed.

Question 98

66. Franklin bought acreage in a distant county, but never went to see the acreage and did not use the land. After the purchase, Susan moved her mobile home onto the land, drilled a well, and lived on the property for 20 years. Susan may become the owner of the land if she has complied with the law regarding
    a. quitclaim deeds.
    b. adverse possession.
    c. voluntary alienation.
    d. prescriptive easements.

Answer 98

66. b. The answer is adverse possession. The woman may file an action in court to receive title to the property if she has complied with state laws. Her possession must have been open, notorious, continuous and uninterrupted, hostile and adverse. Adverse possession is a form of involuntary alienation. A quitclaim deed is frequently used to correct an error in a deed or to release an interest in a property. Prescriptive easements while similar to adverse possession are used to gain permanent access to the property not title.

Question 99

73. Susan uses her neighbor Joe’s driveway to reach her garage, which is on Susan’s property. Susan’s attorney explains that ownership rights of Susan’s real estate includes an easement appurtenant giving her the right to use Joe’s driveway. In this case Joe’s property is the
    a. dominant tenement.
    b. leasehold interest.
    c. servient tenement.
    d. licensed property.

Answer 99

73. c. The answer is servient tenement. In an appurtenant easement the parcel over which the easement runs is known as the servient tenement, and the neighboring parcel that benefits from the easement is known as the dominant tenement. Joe’s property is the servient tenement, and Susan’s is the dominant tenement. The easement does not create a leasehold estate.

Question 100

76. When receiving a gift of a parcel of real estate, one of the two new owners was given an undivided 60% share, and the other received an undivided 40% share. The new owners now hold title as
    a. joint tenants.
    b. community property owners.
    c. tenants in common.
    d. cooperative owners.

Answer 100

76. c. The answer is tenants in common. Tenants in common hold property with undivided fractional interests, and the shares do not have to be equal. In a joint tenancy, each owner holds equal shares and interests to the property. Community property consists of personal or real property acquired by either party in a marriage and belonging to both parties to the marriage. In a cooperative, owners own shares in a corporation, partnership, or trust which owns a property, with each owner holding a proprietary lease and the right to occupy his or her unit.

Question 101

77. What type of estate is created when a property owner deeds a parcel of his property to a town “for recreational purposes only?”
    a. Leasehold estate
    b. Fee simple absolute estate
    c. Fee simple defeasible estate
    d. Life estate

Answer 101

77. c. The answer is fee simple defeasible estate. The deed conveys a fee simple defeasible estate which includes a specific condition on the use of the parcel. If the town uses the parcel for any purpose other than for recreational use, the property owner can take possession of the property through legal action. Holder of a leasehold estate has no ownership, only possession. A fee simple absolute estate has no restrictions on the use of the property. A life estate is limited in duration to the life of the owner of the estate or to the life of some other designated person.

Question 102

88. Zoning authority by a municipality is limited by
    a. a requirement that it not favor one part of the municipality at the sacrifice of another.
    b. a majority vote of the planning board.
    c. a requirement that any actions promote the health, safety, morals, or general welfare of the community.
    d. regulations issued by the Alabama Department of State.

Answer 102

88. c. The answer is a requirement that their actions promote the health, safety, morals, or general welfare of the community. Zoning by its nature tends to favor some parts of the community over others. Planning boards do not vote—they make recommendations. The Alabama Department of State issues rules related to business entities and elections. It has nothing to do with zoning.

Question 103

89. When may the holder of a reversionary interest in a qualified fee estate be able to obtain title to the property?
    a. Only if the remainderman died first
    b. If he or she changed the conditions and the owner was unable to meet the requirements
    c. If the holder of the qualified fee estate breaks the deed condition
    d. If the holder of the qualified fee estate sells the property

Answer 103

89. c. The answer is if the holder of the qualified fee estate breaks the deed condition. The holder of a reversionary interest retains the right to repossess a property if a deed condition is not met or broken. If the condition is broken, the holder of the reversionary interest can go to court to try and obtain ownership of the property. If a remainderman dies, the remainder interest in a life estate passes to his or her heirs. The holder of a reversionary interest does not have the right to change the conditions of a qualified fee estate. A holder of a qualified fee estate may sell the property so long as the conditions or limitations of the qualified fee estate continue.

Question 104

90. What will happen to real estate when its deceased owner did NOT write a will and no heirs can be located?
    a. The ownership will pass by devise.
    b. The ownership will escheat.
    c. The ownership will revert to the previous owner.
    d. The courts will seize the ownership.

Answer 104

90. b. The answer is the ownership will escheat. Title to real estate passes to the state by the state’s power of escheat in the event a person dies intestate and no heirs can be located.

Question 105

99. A tax lien on the property can hinder the sale of a property because it is
    a. a monetary charge that the purchaser must satisfy.
    b. an appurtenance that does not affect the title.
    c. an encumbrance.
    d. an encroachment.

Answer 105

99. c. The answer is an encumbrance. An encumbrance is a claim, charge, or liability that attaches to real estate. It is a right or interest held by someone other than the fee owner of the property that affects title to real estate.

Question 106

100. Peter deeds a parcel of his property to a town “for recreational purposes only.” The deed conveys to the town a
     a. fee simple defeasible estate.
     b. leasehold estate.
     c. fee simple absolute estate.
     d. life estate.

Answer 106

100. a. The answer is fee simple defeasible estate. The deed conveys a fee simple defeasible estate which includes a specific condition on the use of the parcel. If the town uses the parcel for any purpose other than for recreational use, Peter can take possession of the property through legal action. Holder of a leasehold estate has no ownership only possession. A fee simple absolute estate has no restrictions on the use of the property. A life estate is limited in duration to the life of the owner of the estate or to the life of some other designated person.

Question 107

106. Taxes levied on a property owner to pay for installation of sidewalks or sewers are called
     a. ad valorem taxes.
     b. general property taxes.
     c. special excise taxes.
     d. special assessments.

Answer 107

106. d. The answer is special assessments. Special assessments are taxes levied on real estate to fund public improvements.

Question 108

109. A property owner has 40 acres of land with road frontage on only the northern boundary. He sells the southern 20 acres to his sister, who reaches the road by a driveway that passes over her brother’s land. No documents give her ingress and egress rights because they are siblings and don’t think it is necessary. Five years later, the brother dies and his 20 acres are sold to pay estate taxes. Can this landlocked property be sold?
     a. Yes, because Alabama is a caveat emptor state and the buyer must beware
     b. Yes, because the southern 20 acres has an easement by necessity over the northern 20 acres
     c. No, because the property is landlocked and a purchaser cannot obtain clear title
     d. No, because it is fraudulent to offer landlocked property for sale

Answer 108

109. b. The answer is yes, because the southern 20 acres has an easement by necessity over the northern 20 acres. The law seeks to avoid land being landlocked and will not allow it at all when a common owner created the situation giving rise to the property being landlocked.

Question 109

115. The type of deed in which the grantor defends the title back to its beginning is a
     a. general warranty deed.
     b. trustee’s deed.
     c. quitclaim deed.
     d. special warranty deed.

Answer 109

115. a. The answer is general warranty deed. The general warranty deed provides the greatest protection to the buyer because grantors defend the title against both themselves and all those who previously had title.

Question 110

116. Which of the following would be considered acceptable evidence of marketable title?
     a. Title insurance policy
     b. Seller signing a general warranty deed
     c. Deed of trust
     d. Copy of the seller’s current deed

Answer 110

116. a. The answer is title insurance policy. Nothing can guarantee ownership or marketable title. An abstract with a title opinion or a title insurance policy show the title was researched and offer protection against future defects in the title. A deed by itself is not considered evidence of marketability.

Question 111

130. The owner of a secluded area adjacent to an ocean noticed that people from town walked along the shore in front of his property. The owner learned that the local citizens had been walking along this beach for several years. He went to court to try to stop people from walking along the water’s edge in front of his property. The owner is likely to be
     a. unsuccessful because the owner’s property extends only to the high-water mark and the public may use the land beyond this point.
     b. unsuccessful because the local citizens have been doing this for years and thus have an easement.
     c. successful because the owner’s property extends to the low-water mark.
     d. successful because the owner can control access to his own property.

Answer 111

130. a. The answer is unsuccessful because the owner’s property extends only to the high-water mark and the public may use the land beyond this point. Under the doctrine of littoral rights, an owner whose land borders an ocean would own the property up to the mean high-water mark. Any land below this is owned by the government. The homeowner could not block other people from walking along the water’s edge.

Question 112

131. Of the following liens, which would usually be given highest priority in disbursing funds from a foreclosure sale?
     a. A mortgage dated last year
     b. Unpaid real estate property taxes
     c. A mechanic’s lien for work started before the mortgage was made
     d. A judgment rendered the day before foreclosure

Answer 112

131. b. The answer is unpaid real estate property taxes. Unpaid real estate property taxes have first priority and “move to the head of the line” when property is liquidated at a foreclosure sale. They are a statutory lien with priority over liens created by contract, such as mortgages. Unpaid real estate property taxes take priority over mechanic’s liens and judgments, no matter when those liens were recorded.

Question 113

134. In a standard deed, which of the following clauses conveys the rights and privileges of ownership?
     a. Exception clause
     b. Seisin clause
     c. Granting clause
     d. Acknowledgment

Answer 113

134. c. The answer is granting clause. The granting clause states the grantor’s intention to convey the property at the present time. An exception and reservations clause notes any encumbrances, reservations, or limitations affecting the title. The convent of seisin is the grantor’s promise of ownership and ability to convey title in a general warranty deed. The acknowledgement is a formal declaration under oath that the person signing the deed does so voluntarily and that the signature is genuine and is not required to make a deed valid but is often required to record the deed.

Question 114

137. Escheat and eminent domain are both examples of
     a. adverse possession.
     b. transfers of title by descent.
     c. involuntary alienation.
     d. voluntary alienation.

Answer 114

137. c. The answer is involuntary alienation. Involuntary alienation occurs when property is transferred without the owner’s consent. The right of eminent domain allows a government to acquire property for a public purpose through condemnation. When a person dies without a will (intestate) and without heirs, the property passes (escheats) to the state. This process was neither planned nor initiated by the owner before death. Voluntary alienation occurs when property is transferred with the owner’s consent. Adverse possession is the acquiring of title through open, notorious, hostile, and continuous use of another’s property. Descent occurs when an heir inherits a property through probate from a deceased owner who died intestate, without a will