Affiliate Broker Tennessee (TN PSI) National Practice Exam `

What type of interest does the school have on the land given by Joe under specific conditions?

1. Fee simple absolute

2. Fee simple determinable

3. Leasehold interest

4. Life estate

The correct answer is: Fee simple determinable

In this scenario, the school holds a fee simple determinable interest in the land given by Joe when certain conditions are specified. A fee simple determinable is a type of property interest that automatically terminates upon the occurrence of a specific event or condition. This means that as long as the conditions set forth by Joe are met, the school retains ownership of the land. However, if those conditions are violated or not upheld, the ownership reverts back to Joe or his heirs without needing to go through a formal eviction process. This type of interest is characterized by phrases such as "as long as" or "until," which signal the conditions under which the ownership is maintained. Given that the terms of use for the land involve certain conditions that must be fulfilled, the fee simple determinable accurately represents the nature of the school's ownership interest. This contrasts with other forms of ownership such as a fee simple absolute, which offers complete ownership without any conditions, a leasehold interest that provides temporary rights to use the property, or a life estate that is limited to the lifetime of an individual.