National Real Estate Practice Exam

The correct identification of "Tenancy in Common" as the type of ownership that permits two or more holders to own a fraction of undivided interest is rooted in the characteristics of this ownership structure. In a tenancy in common, each owner possesses an individual, undivided interest in the property, meaning that each co-owner has a share of the whole property rather than a specific, divided portion. This arrangement allows for differing percentages of ownership among the co-owners, which can be unequal.

For instance, if three individuals own a property as tenants in common, one might own 50%, while the others might own 30% and 20%. Importantly, each co-owner has the right to use the entire property, but their share can be sold, transferred, or inherited independently of the others. This flexibility and the nature of shared ownership without physical division are essential elements of tenancy in common, distinguishing it from other forms of property ownership like joint tenancy, which includes right of survivorship, or sole ownership, which involves only one individual. Life estate refers to ownership limited to the duration of a person's life, which does not align with the concept of shared fractional ownership among multiple parties.