National Real Estate Practice Exam

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Prepare for the National Real Estate Exam with flashcards and multiple choice questions. Each question includes helpful hints and detailed explanations. Start your journey to becoming a licensed real estate professional today!

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What type of ownership allows two or more holders to own a fraction of undivided interest?

Joint Tenancy
Sole Ownership
Tenancy in Common
Life Estate

The correct answer is: Joint Tenancy

The correct type of ownership that allows two or more holders to own a fraction of undivided interest is known as Tenancy in Common. In this form of ownership, each co-owner holds a distinct share of the property, which can be unequal, and can freely transfer their share without needing the consent of the other co-owners. This means that if one tenant wants to sell or transfer their share, they can do so independently of the other owners. Unlike joint tenancy, which also involves multiple owners but requires that all co-owners have an equal share and includes the right of survivorship (meaning that if one owner dies, their share automatically transfers to the surviving owners), tenancy in common provides more flexibility in ownership arrangements. Sole ownership reflects ownership by a single individual, while a life estate involves ownership for the duration of an individual's life, which is not what the question pertains to regarding undivided interests among multiple holders. Thus, Tenancy in Common is the most appropriate choice for this scenario.