Property Ownership
In Michigan, the 'rule against perpetuities' affects:
AHow long a mortgage can last
BFuture interests in property, preventing ownership restrictions that extend too far into the future✓ Correct
CThe term of a lease agreement
DThe duration of a real estate agent's license
Explanation
The rule against perpetuities limits the validity of future interests in property to ensure that property does not remain subject to restrictions for an unreasonably long time (generally 21 years after a life in being at the creation of the interest). Michigan has codified modifications to this rule.
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Key Terms to Know
Encumbrance
Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Life EstateA freehold interest in real property that lasts only for the duration of a specified person's life.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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