Rights and Interests Quiz

Question 1

Real property taxes are computed based on the property’s

a. subjective value.
b. market value.
c. assessed value.
d. income value.

Answer 1

Assessed value × tax rate = property tax.

Question 2

The process by which the government exercises its power to take private lands for public use is

a. condemnation.
b. escheat.
c. foreclosure.
d. eminent domain.

Answer 2

The process is condemnation; the power is eminent domain.

Question 3

All of the following are governmental powers EXCEPT

a. deed restrictions.
b. taxation.
c. zoning.
d. escheat.

Answer 3

Deed restrictions are private restrictions on the use or sale of a property.

Question 4

Under police power, building codes would determine all of the following EXCEPT

a. acceptable land uses.

b. types of plumbing and electrical materials
allowed.

c. height and structure requirements.
d. methods of construction to be used.

Answer 4

Building codes determine the types of plumbing and electrical materials allowed. The height and structure requirements and methods of construction to be used are also determined by building codes. Zoning codes determine acceptable land uses.

Question 5

The term estate refers to

a. the amount of property owned by an individual.
b. the rights held by someone who has a possessory interest in real estate.
c. a claim against or interest in land held by someone other than the owner of the property.
d. an exercise of police power.

Answer 5

An estate in land refers to the collection or bundle of rights held by someone who has a possessory interest in a piece of real estate.

Question 6

When an individual or entity holds a claim against another’s property, it is

a. an estate.
b. a life tenancy.
c. a lien.
d. a license.

Answer 6

A lien secures payment of indebtedness.

Question 7

All of the following are considered to be real property rights EXCEPT

a. land rights.
b. governmental rights.
c. deed rights.
d. ownership rights.

Answer 7

Real property rights are those of land, government, and ownership, not deed rights.

Question 8

Which of the following would be used by a purchaser to reveal encroachments?

a. Standard title insurance
b. Abstract of title
c. Survey
d. Attorney’s title opinion

Answer 8

A survey would be used to discover zoning setback violations or encroachments.

Question 9

Which of the following liens has first priority?

a. Mechanic’s lien
b. First mortgage
c. Property taxes
d. Court judgment

Answer 9

Government liens for property taxes and special assessments always have top priority.

Question 10

The grantor of a life estate may retain

a. a leasehold estate.
b. a qualified fee estate.
c. rights of remainder.
d. a reversionary interest.

Answer 10

If the grantor of a life estate retains reversionary rights, ownership in fee simple reverts to the grantor at the end of the life estate.

Question 11

If Ann grants a life estate to Ben and specifies that title will be transferred to Carl upon the death of Ben, which of the following is FALSE?

a. Ben is the life tenant.
b. Carl has a reversionary interest.
c. Ben owns the property.
d. Carl is the remainderman.

Answer 11

A reversionary interest could only be held by Ann, the grantor.

Question 12

The holder of a fee estate

a. has rights of alienation.
b. can change deed restrictions.
c. may terminate a servient tenement.
d. must hold a reversionary interest.

Answer 12

A fee estate gives the owner the right to sell, will, or give the property away, which is known as alienation.

Question 13

A married couple has been granted the right to occupy and use a 10-acre tract of land forever. Which of the following does the couple hold?

a. Fee simple estate

b. Estate for years
c. Life estate
c. Leasehold estate

Answer 13

The right to occupy and use land forever is a fee simple estate.

Question 14

In most life estates, the life tenant may do all of the following EXCEPT

a. will the property.
b. sell the property.
c. lease the property.
d. improve the property.

Answer 14

Most life estates terminate upon the death of the life tenant, and therefore cannot be willed. (One exception: a life estate pur autre vie, in which the life of someone other than the life tenant is used as the measuring life.)

Question 15

All of the following could be encumbrances on real estate EXCEPT

a. a lien.
b. an easement.
c. a restrictive covenant.
d. a fixture.

Answer 15

A fixture is real estate. Liens, easements, and restrictive covenants are encumbrances.

Question 16

An estate that lasts only so long as a specified condition is met is known as a

a. life estate.
b. qualified fee.
c. fee simple absolute.
d. deed restriction.

Answer 16

A fee simple defeasible estate (also called qualified fee) lasts “so long as” a condition is met.

Question 17

The right of the government to establish zoning and land use laws is an exercise of which of the following?

a. Police power
b. Escheat
c. Government survey
d. Eminent domain

Answer 17

Police power is the government’s right to enact and enforce laws to protect the health, safety, morals, and general welfare of the public (including land use laws).

Question 18

The grantor of a qualified fee has set the requirement that the property “must be used only as a school”; this requirement is known as a

a. qualified condition.
b. remainder interest.
c. reversionary interest.
d. deed condition.

Answer 18

Deed conditions are used to create the requirements of qualified fee estates.

Question 19

A leasehold estate with a definite expiration date that does NOT require notice by either party is

a. an estate at will.
b. a fee simple absolute.
c. an estate at sufferance.
d. an estate for years.

Answer 19

An estate for years has a specific termination date.

Question 20

Which governmental right is exercised when the state acquires private property through condemnation and makes a payment of just compensation?

a. Escheat
b. Police power
c. Taxing power
d. Eminent domain

Answer 20

Condemnation is the process by which the government exercises its power of eminent domain.

Question 21

What is the difference between a freehold and a leasehold estate?

a. Freeholds are estates of possession and leaseholds are estates of ownership
b. Freeholds have an indefinite duration but leaseholds can terminate
c. Freeholds do not need to be in writing but leaseholds do
d. Freeholds must be fee simple but leaseholds can be a life estate

Answer 21

Freehold estates are of indefinite duration. Leaseholds will terminate.

Question 22

A holder of a life estate has all of the following interests EXCEPT
a. title.

b. ownership.
c. possession.
d. remainder.

Answer 22

life tenant owns the property; therefore, the life tenant has title and possession. The remainder estate belongs to the party who will obtain title upon death of the measuring life.

Question 23

An irrevocable right to use the lands of another is called

a. escheat.
b. a license.
c. an encroachment.
d. an easement.

Answer 23

Easements are non revocable rights of use to another’s property.

Question 24

A holder of a freehold estate has rights of

a. escheat.
b. illegal use.
c. ownership.
d. domain.

Answer 24

Freehold estates are estates of ownership.

Question 25

Which is NOT an estate of ownership?

a. Estate for years
b. Life tenancy
c. Fee simple
d. Qualified fee

Answer 25

An estate for years is a right of possession, not ownership. Life tenancy, like all other free- hold estates, is an estate of ownership.

Question 26

All of the following would be considered to have an interest in land EXCEPT

a. a farmer who is leasing 20 acres.
b. a holder of an easement.

c. a hunter who has been given permission to
hunt in a field.

d. a lender holding a mortgage lien.

Answer 26

Granting permission to use one’s land creates a license, which is not an interest in land.

Question 27

Which of the following estates usually does NOT terminate on the death of the holder of the estate?

a. Life estate
b. Estate for years
c. Estate at will
d. Estate at sufferance

Answer 27

An estate for years is a contract and terminates on the date specified in the lease, not upon death of the lessor or lessee.

Question 28

The property Sam bought 30 years ago had an appurtenant easement for access. Twenty years ago the county built a new road and Sam has not used the easement since that time. When Sam sells the property, the easement

a. will automatically return to the servient property owner.

b. will no longer run with the land due to the statute of
limitations.

c. must be renewed by rerecording it with the county.
d. remains in place and will transfer with the property.

Answer 28

Easements can be terminated by release, merger, or abandonment. If an easement is abandoned and the property owner wants to have it returned, typically the servient property must prove abandonment in court.

Question 29

Protection on a primary home against certain creditors is known as

a. specific lien rights.
b. homestead rights.
c. general lien rights.
d. deed restrictions.

Answer 29

Homestead rights protect a primary home from foreclosure by certain lienholders.

Question 30

Revocable, nonexclusive permission to use property is called

a. an encroachment.
b. a license.
c. an easement.
d. a restriction.

Answer 30

A license can be revoked, and it typically gives nonexclusive permission to use a property.