The Legal Environment of Business, 8e (Kubasek)
Chapter 13 Law of Property: Real and Personal
1) Which of the following is a fixture?
A) a portable television set left behind by the tenant
B) a built-in microwave oven installed by the tenant
C) clothing left behind by the tenant
D) the back yard of a residence that is a part of the original structure
2) A fixture will not be considered as a part of the realty when ________.
A) the fixture is permanently attached to the realty
B) the parties value the fixture to be worth less than $500
C) the fixture is affixed in conjunction with the lease of a property for a business
D) the parties have agreed in writing to treat that fixture as personal property
3) Which of the following statements is true about fixtures?
A) Freestanding appliances are considered to be fixtures.
B) An item that is not permanently affixed to the land cannot be considered as a fixture.
C) If a tenant attaches an item permanently to the realty, it is no longer the personal property of
the tenant.
D) When a trade fixture is attached to the realty, it is no longer the personal property of the
business tenant.
4) Alex leases property from Sandra for business. Alex opens a hardware repair shop in this
property. He affixes welding equipment to the property. After a period of time, Alex decides to
move his business to a different location. Which of the following statements is true of this
scenario?
A) Alex may not move the welding equipment, as it is now Sandra’s property.
B) Alex may move the welding equipment only if a written agreement states that the parties will
treat the welding equipment as his personal property.
C) Alex may not move the welding equipment, as it is essential to the functioning of the
structure.
D) Alex may move the welding equipment, as the welding equipment is a trade fixture.
5) Which of the following statements is true of the extent of ownership of land?
A) A landowner is legally entitled only to 500 ft of airspace above his or her land.
B) A landowner has to obtain mineral rights separately from the government.
C) A landowner may sell mineral rights to another person.
D) A landowner has unrestricted rights to use the water flowing across or underneath one’s
property.
6) Personal property is land and everything permanently attached to it.
7) Trade fixtures are treated as personal, not real, property because of a presumption that neither
party intends such fixtures to become a permanent part of the realty.
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8) Water rights to land are restricted in that one cannot divert water flowing across the property
in such a manner as to deprive landowners downstream of the use of water from the stream.
9) Ownership of land usually includes the land below the surface.
10) An item that is initially a piece of personal property but is later attached permanently to the
realty is known as a fixture.
11) Property rights are static.
12) What is a fixture? In a landlord-tenant relationship, who has the right to a fixture when the
lease expires or the tenant otherwise leaves the leased property?
13) Discuss whether ownership of land includes the air, water and mineral rights associated with
the land.
14) Discuss the various estates in land.
15) Which of the following estates is the most complete estate?
A) easement
B) life estate
C) fee simple absolute
D) leasehold estate
16) William owns a life estate in a farm. On his death, fee simple absolute ownership of the land
will pass to James. Which of the following interests in real property does James have?
A) an easement
B) a life estate
C) a future interest
D) a leasehold estate
17) ________ interest provides the right to own and possess land against all others, without any
conditions.
A) Fee simple absolute
B) Conditional estate
C) Life estate
D) Easement
18) Matthew owns a ranch. He has the right to own and possess that land until his death. When
he dies, the ranch will pass to his heirs. Which of the following interests in real property does
Matthew have?
A) easement
B) future interest
C) leasehold estate
D) fee simple absolute
19) Which of the following statements is true of a conditional estate?
A) It is the present right to own and possess the land in the future.
B) When a person’s interest terminates, the interest must be transferred to the former owner.
C) It can be set up so that failure to meet a condition terminates the estate.
D) It is the right to own and possess land until one dies, subject to the condition that the property
cannot be used in such a way as to destroy its value.
20) Mary owns a farm. She has the right to use it for any legal purpose but must grow a certain
quantity of wheat on it every year. If she fails to grow this quantity of wheat, her right to that
land terminates. Which of the following interests in real property does Mary have?
A) easement
B) conditional estate
C) life estate
D) fee simple absolute
21) A ________ interest provides the right to own and possess the land until one dies, but forbids
the owner from using the property in such a way as to destroy its value to future holders.
A) fee simple absolute
B) life estate
C) future interest
D) conditional estate
22) Debra owns a farm. She has the right to own and possess the farm until her death. She is not
allowed to waste the property, and she cannot use the property in such a way as to destroy its
value to future holders. Which of the following interests in real property does Debra have?
A) fee simple absolute
B) conditional estate
C) life estate
D) future interest
23) Simon owns a property. He may not destroy its value to future holders. After his death, the
property will pass to Rachel. Which of the following interests in real property does Rachel have?
A) life estate
B) future interest
C) conditional estate
D) fee simple absolute
24) A(n) ________ is a contract that transfers possessory interest in a property from the owner to
the tenant.
A) lease
B) license
C) accession
D) fee tail
25) Which of the following is the best example of an easement?
A) Thelma has the right to receive Jane’s property when she dies.
B) Dark Power Company has the right to run power lines across Jane’s property.
C) Royal Blue hotel temporarily allows Ralph to stay on their property.
D) Jane acquires stock in the corporation that owns an apartment and obtains a permanent lease
on one unit.
26) In which of the following cases does an easement by prescription arise?
A) The state acquires a person’s property through condemnation.
B) A power company enters into a written agreement to lay cables under one’s front yard.
C) A neighborhood family openly uses another’s back yard as a short cut to the beach every day
for 25 years.
D) A person leases out his garage for the purpose of storing furniture.
27) Kathy’s property is landlocked. The only possible route to her property crosses George’s
farm. Which of the following property interests provides Kathy the right to use George’s
property?
A) conditional estate
B) easement by necessity
C) easement by prescription
D) leasehold interest
28) Which of the following is a feature of a leasehold?
A) It is an ownership interest.
B) It is the present right to possess and own land in the future.
C) The person who has a leasehold is entitled to use the property until a certain condition occurs.
D) The person who has a leasehold is usually entitled to exclude the property owner for the
period of the lease.
29) An easement by prescription arises when ________.
A) one openly uses a portion of another’s property for a statutory period of time
B) a piece of property is divided and, as a result, one portion is landlocked
C) the landowner expressly agrees to allow the holder of the easement to use the land in question
D) the landowner transfers possessory interest for an agreed-upon period
30) Charlie owns a building. He enters into a contract with Atlas Inc. that allows it to place a cell
phone tower on top of his building. Which of the following interests in real property does Atlas
Inc. have?
A) leasehold estate
B) easement by express agreement
C) conditional estate
D) license
31) Which of the following statements is true about easements?
A) One who has an easement is entitled to exclude all others, including the property owner for
the period of the agreement.
B) One who has an easement is entitled to use the property for any legal purpose that does not
destroy the property’s value.
C) An easement by prescription arises when the landowner enters into a contract to allow the
land to be used for a specific purpose.
D) An easement by necessity arises when a piece of property is divided and, as a result, one
portion is landlocked.
32) A(n) ________ is an interest in real property that provides the public a temporary right to
enter a business for the purpose of purchasing goods or services.
A) license
B) leasehold
C) conditional estate
D) easement
33) Which of the following types of ownership allows co-owners to have unequal shares?
A) joint tenancy
B) tenancy in common
C) periodic tenancy
D) tenancy at will
34) In which of the following types of ownership does the ownership interest transfer to a
person’s heirs upon his or her death?
A) joint tenancy
B) tenancy in common
C) tenancy by the entirety
D) life estate
35) In which of the following types of ownership is the ownership interest divided among the
other owners upon an owner’s death?
A) joint tenancy
B) tenancy in common
C) tenancy by the entirety
D) fee simple absolute
36) In which of the following types of ownership is the ownership interest transferred to an
owner’s spouse upon his or her death?
A) joint tenancy
B) tenancy in common
C) tenancy by the entirety
D) fee simple absolute
37) Which of the following statements is true about joint tenancy?
A) All the co-owners own equal shares of the property.
B) Upon the death of the tenant, his or her heirs receive the property interest.
C) An owner may not sell his or her shares in the interest without the consent of the other
owners.
D) Owners’ interest in the property cannot be attached by creditors.
38) Which of the following statements is true about tenancy in common?
A) All of the co-owners must own equal shares of the property.
B) Upon the death of an owner, his or her property interest is divided among the other owners.
C) The owners’ interests in the property cannot be attached by creditors.
D) An owner may sell his or her interest in the property without the consent of the other owners.
39) A(n) ________ exists only when co-owners are a married couple.
A) tenancy in common
B) tenancy by the entirety
C) joint tenancy
D) easement by prescription
40) Which of the following statements is true of tenancy by the entirety?
A) Upon the death of an owner, his or her property interest is divided among the other owners.
B) Upon divorce, tenancy by the entirety automatically becomes tenancy in common.
C) Owners may sell their interest in the property without the consent of the other owners.
D) Creditors of only one owner may attach the property.
41) Which of the following is a feature of tenancy by the entirety?
A) One owner is not permitted to sell his or her interest in the property without the consent of the
other owner.
B) Upon divorce, tenancy by the entirety automatically becomes joint tenancy.
C) Upon the death of an owner, his or her property is divided among the other owners.
D) All the owners’ interest in the property can be attached by one of the owners’ creditors.
42) In the context of condominiums, “CC&Rs” refers to ________.
A) commercial codes and regulations
B) conventional contracts and releases
C) covenants, conditions, and restrictions
D) a cooperative’s credit and restitution documents
43) In a leasehold estate, a tenant may move out of the property and sublease it to another party
unless prohibited by the lease.
44) A tenant’s right to occupy property in a co-ownership varies with the type of tenancy.
45) The owner acquires all the buildings in a condominium ownership interest.
46) Explain the rights of a landlord and a tenant in a leasehold estate.
47) Explain the rights of the owners and the association in a condominium ownership interest.
48) Which of the following is the first step in the conveyance of property?
A) acceptance of the deed by the grantee
B) delivery of the deed
C) execution of the deed
D) recording of the deed