Property OwnershipIntermediateAlabama Exam

The legal test for whether an item is a fixture (real property) includes which of the following factors?

AThe age and value of the item

BMethod of attachment, adaptation to the property, and intention of the partiesCorrect

CWhether the item is insured

DThe number of times the item has been moved, as is typical in most transactions

Why Method of attachment, adaptation to the property, and intention of the parties Is Correct

Answer B: Method of attachment, adaptation to the property, and intention of the parties

The three primary tests for whether an item is a fixture include: (1) method of attachment (permanently affixed), (2) adaptation (uniquely fitted to the property), and (3) intention of the parties at the time of installation. Intention is generally the most important factor.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

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Key Terms to Know

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Depreciation

A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Easement

A non-possessory right to use another person's land for a specific purpose.

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