California Real Estate Practice Exam

An owner takes title to a property on the condition that he never use it to manufacture alcoholic beverages on the property. What term best describes his ownership interest?

1. fee simple absolute

2. fee simple qualified

3. life estate

4. leasehold estate

The correct answer is: fee simple qualified

This is an example of a fee simple qualified ownership interest because there is a specific condition or limitation attached to the title. The owner is not able to use the property for the manufacturing of alcoholic beverages. Option A, fee simple absolute, refers to ownership without any conditions or limitations. Option C, life estate, is a type of ownership interest where the owner only has possession for the duration of their life. Option D, leasehold estate, is a type of ownership where a tenant has the right to occupy and use the property, but the ownership remains with the landlord. This does not apply to the situation described in the question, as the owner is not leasing the property to another person.