Insiders Guide To Passing The Washington Real Estate Exam:

Insider's Guide To Passing The Washington Real Estate Exam:

Chapter 2 - Estates In Land And Methods Of Holding Title Flashcards Ben receives a life estate in a property, with his nephew Will designated as the remainderman. When Ben dies, what kind of interest does Will receive?A) Fee simple estateB) Life estateC) Remainder interestD) Reversionary interest

• Fee simple estateThe interest that passes to a

designated person upon the death of the life tenant (or other measuring life) is a fee simple estate A three-year lease ends. The tenant is allowed by the landlord to stay on and to continue to pay rent, on a

month-to-month basis. This would be a/an:A) Estate for

yearsB) Periodic tenancyC) Term tenancyD) Tenancy at sufferance

• Periodic tenancyA lease that has no fixed termination

date, but lasts for a specific period and continues until one party gives the other notice of termination, is a periodic tenancy

A primary advantage of owning a property in severalty is:A)

FlexibilityB) InheritabilityC) Joint OccupancyD) Shared risk

• FlexibilityProperty owned by only one person ("in

severalty") gives that owner more flexibility to use or dispose of the property than she would have if she shared ownership. By definition, ownership in severalty doesn't involve joint occupancy. By definition, ownership in severalty doesn't involve joint occupancy or shared risk.And properties held in fee simple are generally inheritable whether there's only one owner or more than one.A popular downtown condominium project has many common facilities, such as a swimming pool, tennis courts, a gym, and a spa. These common elements are likely to be

owned by:A) The owners of the units which are located

adjacent to the amenitiesB) A corporation in which the unit owners own stockC) The unit owners, as an undivided percentage interestD) The condominium developer

• The unit owners, as an undivided percentage interest

A life estate will last until:A) Economic conditions render it

unfeasibleB) The death of the grantorC) The death of the recipientD) The recipient moves out

• The death of the recipientA life estate lasts until the

death of the measuring life. In most cases the life tenant (in other words, the recipient of the life estate) is also the measuring life, and therefore the life estate ends upon the life tenant's death, so that's the best answer here.A real estate agent lists Harold's home, which he owns as a life estate. Harold's children hold the remainder interest.Which of the following is true?A) Anyone who buys Harold's life estate receives only the interest held by HaroldB) Harold's children need to sign the listing agreementC) The buyer will automatically receive a fee simple absolute interestD) Since a life estate cannot be sold, the listing is invalid

• Anyone who buys Harold's life estate receives only the

interest held by HaroldA purchaser wouldn't be buying a fee simple absolute interest in the property, but rather only the life estate held by the seller. The property would pass to Harold's children at the end of the life estate's measuring life.Erin entered into a lease that begins February 1, and is to end on January 31 three years later. This leasehold is

a/an:A. estate for yearsB. tenancy at sufferanceC. periodic

tenancyD. estate from year to year

• Estate for yearsAn estate for years begins on a certain

date and ends on a certain date.

A broker would need to have a securities license to

participate in:A) A sale of both real and personal propertyB)

A sale of a commercial building that is showing a profitC) A transaction involving an investment contractD) Listing a property owned by a corporation

• A transaction involving an investment contractA

securities license would be necessary in a transaction that involves sale of securities, without also involving the sale or lease of real property.A limited partnership is preferable method of owning real

estate investment properties because:A) All owners share

equal control over the direction of the investmentB) It allows persons with less capital to invest to still participate in real estate projectsC) Ownership is divided among the shareholdersD) Taxation is similar to that of a corporation

• It allows persons with less capitol to invest to still

participate in real estate projectsA limited partnership is open to limited partners, who may invest smaller amounts than its general partners, and in return receive limited liability, which keeps them from becoming personally liable for the partnership's debts Two cousins want to buy a house together and arrange it so that if one does, the other will receive full ownership of the property. They will probably take title to the property

as:A) Community propertyB) Joint tenancyC) Tenancy by

the entiretiesD) Tenancy in common

• Joint tenancyJoint tenancy includes the right of

survivorship, so that one joint tenant would own the entire property if the other joint tenant died. Unmarried persons cannot own property as community property Jill and Julie are joint tenants. Jill sells her interest in the

property to Sam. Julie and Sam:A) Are automatically joint

tenantsB) Do not own the property together, because the sale of property by a joint tenant is voidC) Are tenants in commonD) Are tenants in serveralty

• Are tenants in commonThe only possible way for Jill and

Sam to hold title is as tenants in common, because joint tenants must take title in the same deed at the same time, and Jill and Sam didn't do that. Ownership in severalty is title held by one person.Maria has a lease that begins on June 1and ends on

December 1 of that sameyear. Maria has a:A) Periodic

estateB) Tenancy at willC) Term tenancyD) Joint Tenancy

• Term tenancyA term tenancy, also known as an estate

for years, is a tenancy for any fixed term. This is true even if the term is for less than one year.Jack receives a life estate in a property, for the life of Larry.When Larry dies, the property passes to Mary, rather than

to the grantor or the grantor's heirs. This is a:A) Life estate

pur autre vie, in remainderB) Life esate pu autre vie, in reversionC) Standard life estate, in remainderD) Standard life estate, in reversion

• Life estate pur aurtre vie, in remainderA life estate pur

autre vie is based on a measuring life that's someone other than the life tenant. An estate in remainder is one that passes to a third party at the end of the measuring life, rather than reverting to the grantor or the grantor's heirs.A tenancy in which the tenant is in possession with the permission of the landlord, but there is no definite rental

period or duration of possession, is called a/an:A) Estate in

remainderB) Estate for yearsC) Periodic estateD) Estate at will

• Estate at willThis is the definition of an estate at will

(tenancy at will)

Property held in tenancy by the entirety:A) Cannot be

transferred through the right of survivorshipB) Can be physically divided, by either party selling his or her interest separately from the other ownerC) Is owned by a married coupleD) Can be partitioned

• Is owned by a married coupleTenancy by the entirety

property is owned by married couples, in noncommunity property states

An example of a freehold inheritable estate is a/an:A) Life

estate (not pur autre vie)B) Leasehold estateC) Estate at willD) Fee simple defeasible estate

• Fee simple defeasible estateThe fee simple estate is the

highest and most complete for of ownership, and it is inheritable and of potentially infinite duration. Generally, life estates aren't inheritiable

Mark and Kim's two-year lease on their apartment expires.Unhappy that the couple doesn't plan to renew the lease, the property manager charges them one month's rent for failure to give notice. If the lease is silent regarding this

issue, in this case:A) No notice is required and no

additional fee must be paidB) Mark and Kim owe on month's additional rentC) Mark and Kim owe one month's additional rent plus a nonrenewal feeD) Mark and Kim will lose the full amount of their security deposit

• No notice is required and no additional fee must be

paidThe tenants have an estate for years: a lease for a

specific period of time. The lease is presumed to terminate at the end of the period, unless the parties act to renew it.No notice, or penalty associated with not giving notice, is necessary

A corporation takes title to real property through a/an:A)

Estate in severaltyB) Joint tenancyC) Tenancy at willD) A corporation may not take title

• Estate in severaltyA corporation cannot take title in joint

tenancy, because of its potentially perpetual existence.Corporate property is owned in severalty by the corporation itself.A store owner would like to sell common stock in her business (a chain of stores) to investors. She asks an

inexperienced licensee for help. The licensee should:A)

Ask her managing broker which listing agreement to useB) Disclose her licensed status on the stock certificatesC) Hire an attorney to draft the listing agreementD) Refer the client to a securities dealer

• Refer the client to a securities dealerA real estate

licensee would not be involved in a sale of stock in a company that does not also involve the sale of real property. A licensed securities dealer would need to be involved instead.An investor would like to invest in real estate, but without being involved in management or subjecting himself to any

personal liability. He should invest in a:A) General

partnershipB) Joint ventureC) Limited partnershipD) Sole partnership

• Limited partnershipA limited partnership in a limited

partnership is not personally liable for the partnership's debts and obligations. He cannot have a voice in management operations, though.