End of Chapter 7 Questions and Answers

End of Chapter 7 Questions and Answers - End of Chapter 7...

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End of Chapter 7 Questions and Answers 1. Steve and Ruth Marcus have listed their home with Miami Vice Realty. The Marcus's built the home themselves and included an array of features that make the home particularly attractive. An agent from Miami Vice has come to the Marcus's and asked them to list all the items that are NOT included with the home. Here is the Marcus's list. Which of the following do you think could create issues in the event of a sale, or, in other words, which do you think would be classified as fixtures without an agreement otherwise? a- a Sub-Zero built-in refrigerator that matches the kitchen cabinets b- equipment used with the central vacuum unit within the house c- the washer and dryer built into the cabinets of the laundry room d- the custom-made window shutters e- the above ground but landscaped and custom cut deck around a 12 person jacuzzi f- the gazebo in the back yard g- the swing set in the back yard h- the ceiling fans in each room i- the 10 foot TV set that is set into a hole in the wall of the media room Answer: a, b, c, d, e & f are customized as per the house to make it more attractive and functional, moreover removing them will cause damage to the property, hence they are considered “fixtures without an agreement”. g, h & i are things that need to be agreed upon. Although they add to the functionality of the house, they can be easily removed without damage to house. 2. Anastasia Makarenko's great uncle died two weeks ago. She has been invited to the reading of her great uncle's will. As she listens carefully, the following language is read: To my niece, Anastasia, who has cared about me and written to me and cheered me on many occasions, I leave my interest in the building at 2000 N.42nd Street, NY, NY to her for her life with the remainder to her children. Anastasia is confused -- does she own the building? What rights does she have in the building? Provide Anastasia with some advice on what she has actually inherited. Answer: Yes, Amanda now has “life-estate” form of freehold interests in the building. She has all the rights of an owner except right of transfer. When she dies the interest will automatically be transferred to her children. This type of arrangement reduces the tax on her children when they get the interest in the building. 3. Define the term "freehold." Label the following land interests as freehold or non- freehold interests. "To my son for life." "To my daughter for six months." "Robert Smith may lease these premises for $550 per month for as long as he desires." "To my son so long as he does not use the property for gaming purposes."
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Answer: Freehold is a type of interest that an individual has on property. Freehold estates are those types of land interests that are unlimited in their length of duration. "To my son for life." – Freehold (life estate)
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This note was uploaded on 02/07/2012 for the course FIN 4380 taught by Professor Staff during the Spring '08 term at Texas State.

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End of Chapter 7 Questions and Answers - End of Chapter 7...

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