California Real Estate Practice Exam

Under what condition is Owner A allowing B to use his property?

1. As long as C is alive

2. Until Owner A decides otherwise

3. For a fixed lease term of 10 years

4. Under a renewable lease agreement

The correct answer is: As long as C is alive

The correct answer is that Owner A is allowing B to use his property as long as C is alive. This scenario describes a scenario known as a "life estate," where the rights to the property are granted to one party (in this case, B) for the duration of another person's life (C). In this arrangement, Owner A retains the ownership of the property but transfers the right to use the property to B, contingent upon C's lifespan. This means B can utilize the property until C passes away, at which point the rights to the property would revert back to Owner A or pass to a third party, depending on the specifics outlined in the original ownership arrangement. The other options involve different types of property agreements that do not hinge on a life event but rather on time frames or conditions set by Owner A. For instance, the option regarding a fixed lease term specifies a predetermined period, indicating that the rights would not last beyond ten years regardless of any outside factors. The renewable lease agreement suggests terms that could change or continue but still rely on specific agreements rather than life conditions. Owner A’s allowance under the given answer specifically connects the usage rights directly to the status of C's life, making it uniquely dependent on that condition.