Kovats Real Estate School Practice Test

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Which of the following terms is synonymous with ownership of property for an indefinite duration?

Tenancy agreement
Freehold estate
Contractual lease
Life estate

The correct answer is: Freehold estate

The term that signifies ownership of property for an indefinite duration is “Freehold estate.” A freehold estate denotes a type of interest in real property that is not limited in time. This means the owner has the right to possess and use the property for as long as they choose, without any expiration of ownership. In contrast, a tenancy agreement refers to a contractual arrangement where a tenant rents property from a landlord for a specific duration, typically a set number of months or years. A contractual lease also outlines a specified timeframe for which one party can occupy or use a property, while a life estate grants ownership for the duration of a person’s life; upon their passing, the ownership will revert to another party or be passed on according to the terms established in the estate plan. Hence, “Freehold estate" is the term that accurately reflects ownership lasting indefinitely.