Real Estate · Property Ownership

Which of the following best describes 'fee simple' ownership?

Correct answer

The highest and most complete form of ownership, with no inherent time limit

  1. A An ownership interest shared with the government
  2. B The highest and most complete form of ownership, with no inherent time limit
  3. C A life estate that ends at the owner's death
  4. D A leasehold interest of fixed duration

Why this is the answer

Fee simple (or fee simple absolute) is the highest and most complete form of real property ownership. The owner has the rights to possess, use, alter, transfer, and devise the property without an inherent time limit. Fee simple is what most residential homeowners hold. It is subject only to government powers (taxation, eminent domain, police power, escheat) and any private encumbrances (mortgages, easements, restrictive covenants). A life estate, by contrast, lasts only for the lifetime of a specified person and then passes to a remainderman. A leasehold is a tenant's interest, limited in duration. 'Fee simple defeasible' is a fee simple that can be lost if a specified condition occurs.
Source: Real Estate Principles, Estates in Land

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About this topic: Property Ownership

Fee simple, joint tenancy, tenancy in common, and life estates each carry different rights, transferability, and survivorship rules. This is one of 11 Salesperson (National) questions on property ownership, each with a full explanation on a single study page.

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