CHAPTER 2
Legal Foundations to Value
Test Problems
1. Which of the following is not a form of property right?
2. Which of these easements is most likely to be an easement in gross?
3. Rules used by courts to determine whether something is a fixture include all
except:
4. Which of the following is a titled estate?
5. Which of these forms of co-ownership could best be described as “normal
ownership,” except that multiple owners share identically in one bundle of rights?
6. Which of these marriage-related forms of co-ownership gives each spouse a one-
half interest in any property that is “fruits of the marriage”?
7. Which of these liens has the highest priority?
8. Restrictive covenants for a subdivision usually can be enforced by:
9. Timeshare programs can involve which of the following claims or interests?
10. Every condominium buyer needs to know the details of which document(s):
Study Questions
1. Explain how rights differ from power or force, and from permission.
Solution: Rights have three characteristics. First, rights are claims or demands
that our government is obligated to enforce. Second, rights are nonrevocable and
Rights are different from power because the government is obligated to honor and
support the claims arising from rights. Government will not support claims
Unlike permission, which is revocable, rights are nonrevocable and cannot be
2. A developer of a subdivision wants to preserve the open space and natural habitat
that runs along the back portion of a series of large lots in the proposed
subdivision. He is debating whether to use restrictive covenants to accomplish
this or to create a habitat easement on the same space. What are the pros and cons
of each choice?
Solution: A developer may choose to use restrictive covenants to limit the use of
the land for environmental purposes, while maintaining the quality, stability, and
Court decisions frequently follow common law, which holds that property should
be used productively, and favor fewer restrictions over the use of land. Whether
the restriction is in an isolated deed or part of a general set of subdivision
On the other hand, the developer may choose to use a habitat easement on the
property. A habitat easement can limit the use of the land for the specific purpose
of protecting the environment. An easement in gross, defined as the right to use
3. Why are restrictive covenants a good idea for a subdivision? Can they have any
detrimental effects on the subdivision or its residents? For example are there any
listed in the chapter that might have questionable effects on value of a residence?
Solution: Restrictive covenants are used most often in subdivision developments
to ensure the quality, stability, and value of the lots. However, they can sometimes
have detrimental effects on the subdivision. For example, adding a free standing
4. The traditional common law concept of landlord-tenant relationship was that the
landlord’s obligation was simply to stay off the property and the tenant’s
obligation was to pay the rent. Explain why this is an obsolete arrangement for
apartment residents in an urban society.
Solution: Historically, the common law application of a landlord-tenant
relationship centered on agrarian relationships formed in pre-industrial England.
Modern society views residential tenancy as the provision of services. It can be
difficult or impossible for one tenant, alone, in an apartment complex to control
5. A friend has an elderly mother who lives in a house adjacent to her church. The
church is growing, and would welcome the opportunity to obtain her house for its
use. She would like to support the needs of her church, but she does not want to
move and feels strongly about owning her own home. On the other hand, your
friend knows that she will not be able to remain in the house many more years,
and will be faced with moving and selling within a few years. What options can
you suggest as possible plans to explore?
Solution: One possible option is to unbundle the fee simple absolute into an
ordinary life estate and remainder estate. The church can purchase a remainder
estate while the owner retains a life estate. The owner thereby receives either
6. A friend has owned and operated a small recreational vehicle camp on a lake in
Daytona Beach, Florida. It is close to the ocean and close to the Daytona
Speedway, home of the Daytona 500 and a host of other prominent races. The
occupants are very loyal, making reservations far in advance, and returning year
after year. She is asking your thoughts on whether to continue the camp as a
short-term rental operation, or to convert it and sell the parking spaces as
condominium parking spaces, or to convert to condominium time-share lots.
What thoughts would you offer?
Solution: Maintaining ownership of the small recreational vehicle camp provides
the owner continued control of the property, but she also retains responsibility for
property management and expenses associated with running the camp. Converting
7. In the United States, the bundle of rights called real property seems to have gotten
smaller in recent decades. Explain what has caused this. Why is it good? Why is
it bad?
Solution: The bundle of rights has gotten smaller in recent decades because of the
government’s increased use of its police power. The government has the duty to
protect the health, safety, and welfare of the American people. Additionally, after