Affiliate Broker Tennessee (TN PSI) National Practice Exam `

What does a "fee simple determinable" ownership specify?

1. Unconditional ownership with no obligations

2. Ownership as long as certain conditions are met

3. Temporary ownership for a specific time

4. Ownership that requires inspections every year

The correct answer is: Ownership as long as certain conditions are met

Fee simple determinable ownership refers to a type of property ownership that is contingent upon the occurrence of a specific event or condition. This means that the ownership is granted as long as certain conditions are adhered to. If the specified condition fails to be met, the ownership automatically reverts back to the previous owner or a designated individual, known as the grantor. This type of ownership is characterized by its language—typically using phrases like “as long as,” “while,” or “during,” which clearly outline the conditions under which the property is held. The key aspect to understand is that it allows for continued ownership only under those predetermined circumstances; if those conditions are violated or not upheld, the ownership ends and the property reverts. In contrast, unconditional ownership without obligations would imply a more absolute and secure property right, while temporary ownership for a specific time does not apply as it lacks this condition-based ownership framework. Ownership requiring inspections every year does not define a specific condition related to the use or ownership of the property itself, which is central to understanding fee simple determinable. Thus, the definitive element of fee simple determinable is its basis in ongoing compliance with specified conditions.