Real Estate Principles and Property Ownership
Real Estate Principles and Property Ownership is the foundation domain of the CeRER exam. Items here test whether you can classify what is being sold, who owns it, and which rights actually transfer at closing. Expect fact patterns rather than definitions: a fence line, a riparian lot, a co-owned duplex, an heirloom chandelier.
Land, fixtures, and the bundle of rights
Real property is land, permanently attached improvements, and the legal rights above and below the surface. Personal property becomes a fixture through the three-part test: annexation, adaptation, and intention to remain. Trade fixtures installed by a commercial tenant remain the tenant's. The bundle of rights - possession, use, enjoyment, exclusion, and disposition - can be severed and sold separately as mineral rights, air rights, easements, and life estates.
Estates and co-ownership
Freehold estates are fee simple absolute, fee simple defeasible (determinable or subject to condition subsequent), and life estates. Leaseholds are non-freehold. Concurrent ownership turns on survivorship and unity of title: tenancy in common allows unequal shares with no survivorship; joint tenancy requires equal shares plus the four unities and carries survivorship; tenancy by the entirety is reserved for spouses in most states; community property applies in a minority of states.
Encumbrances and title
Liens, easements, encroachments, licenses, and covenants all encumber title without transferring ownership. An easement appurtenant benefits a dominant parcel and runs with the land; an easement in gross benefits a person. Prescriptive easements require open, notorious, hostile, continuous use for the statutory period. A quitclaim deed conveys whatever interest the grantor holds - which may be nothing.
Worked example
Two siblings inherit a cottage deeded to them "as tenants in common, 60/40." One dies with a will leaving everything to a charity. The charity takes the decedent's 60% interest; the survivor keeps 40% and gains nothing by survivorship, because unequal shares and the words "tenants in common" defeat joint tenancy. If the deed had read "joint tenants with right of survivorship," the survivor would own 100% and the will would not control the cottage.
Traps that cost marks
Assuming survivorship applies to any co-ownership; confusing a license with an easement; treating recording as proof of ownership rather than as constructive notice; forgetting that a life tenant may not commit waste; and overlooking that a fixture dispute is decided by intention, not by who paid for the item.