Florida Broker Practice Exam

Which estate allows a tenant to have possession but not ownership?

1. Fee simple estate

2. Remainder estate

3. Nonfreehold estate

4. Life estate

The correct answer is: Nonfreehold estate

A nonfreehold estate is a type of property interest that grants a tenant the right to possess and use the property for a specified duration without conferring ownership. This arrangement generally occurs in leasing scenarios where the tenant has rights to occupy the property, but the ownership remains with the landlord. In this context, nonfreehold estates are often characterized by lease agreements that stipulate terms and conditions, detailing how long the tenant can remain in the property and under what circumstances the agreement can be terminated. It effectively establishes a tenant-landlord relationship without transferring fee simple ownership, which includes complete ownership rights. This distinction is significant in real estate, as it helps clarify the rights of tenants versus owners. In contrast, the other choices relate to estates that either involve ownership or are closely linked to ownership rights, such as fee simple estates that grant absolute ownership or life estates that confer rights until the death of a specified individual. Remainder estates also relate to future interest in property ownership after certain conditions are met. Therefore, the nature of a nonfreehold estate is particularly important in property law as it delineates the parameters of possession and ownership.