Texas Real Estate State Practice Exam

Which type of ownership grants ownership with the greatest bundle of rights?

1. Qualified Fee

2. Fee Simple

3. Life Estate

4. Defeasible Fee

The correct answer is: Fee Simple

The type of ownership that grants ownership with the greatest bundle of rights is Fee Simple. This form of ownership is the most extensive interest one can have in real property and includes several rights. These rights encompass the ability to possess, use, transfer, and exclude others from the property. Under Fee Simple ownership, the owner has the maximum level of control over the property, allowing them to sell, lease, or bequeath it as they see fit, without any significant limitations. This means the owner can also modify the property, use it for various purposes, and enjoy the benefits of it without outside restrictions, as long as they comply with the law. Other forms of ownership have limitations that restrict some of these rights. For instance, a life estate only grants ownership for the duration of a person's life, after which the property reverts back to the original owner or designated beneficiaries. A defeasible fee includes conditions that can cause the property to revert to a previous owner if certain criteria are not met. Meanwhile, a qualified fee also comes with conditions and limitations that can affect the owner's rights and control over the property. Thus, the Fee Simple ownership stands out as the one providing the most comprehensive set of rights and privileges associated with real estate ownership.