Property Ownership
The broker exam assumes you already know the basics of real property and simply tests them at greater depth and speed. This topic covers the nature of real versus personal property, the estates a person can hold in land, and the ways two or more people can co-own. A broker must recognize these interests instantly because a supervising broker reviews the listings and contracts that describe them.
Real vs. Personal Property and the Bundle of Rights
Real property is land and everything permanently attached to it, together with the associated rights; personal property (chattels) is movable and not permanently attached. A fixture is personal property that has become part of the real estate. The classic tests are remembered as MARIA: Method of attachment, Adaptation to the property, Relationship of the parties, Intention of the party who attached it, and Agreement of the parties. Ownership is a bundle of rights: the rights to possess, use, enjoy, exclude, and dispose. A trade fixture installed by a commercial tenant for business remains the tenant's personal property and is normally removable before the lease ends.
Estates in Land
A freehold estate is ownership of indefinite duration. The fee simple absolute is the largest estate: unlimited duration, freely transferable, and inheritable. A defeasible fee can be lost if a stated condition occurs. A life estate lasts only for the life of a measuring person and is not inheritable; when the measuring life ends, title passes to the remainderman or reverts to the grantor (a reversion). Less-than-freehold (leasehold) estates give possession for a limited time without ownership. A broker supervising commercial deals must also understand encumbrances such as easements and liens that ride along with these estates.
Forms of Co-Ownership
Tenancy in common gives each owner an undivided interest that may be unequal and that passes to the owner's heirs, with no survivorship. Joint tenancy requires the four unities (time, title, interest, and possession) and carries the right of survivorship, so a deceased joint tenant's share passes automatically to the survivors outside probate. Tenancy by the entirety is a survivorship form reserved for married couples in some states. Community property, used in some states, treats most property acquired during marriage as owned equally. Brokers also encounter ownership by business entities and in common-interest developments (condominiums and cooperatives), where the form of ownership shapes how title is taken and transferred.