Subject 3 of 19
Four connected units explain interests in land, encumbrances, deeds, and the closing process.
4 chapters 19 lessons 5 free practice questions
Read the rule, try the recall check, then continue to the next lesson.
Chapter 1
Build a complete ownership map, from land and fixtures through estates, survivorship, trusts, business entities, condominiums and cooperatives.
Exam rule
Land is the earth, the space above it and the rights below it. Real estate means the land and permanent improvements. Real property adds the legal rights that go with ownership. Personal property, also called a chattel, is movable. A fixture begins as personal property but becomes part of the real estate, and courts decide the question by weighing attachment, adaptation, intent and the parties' relationship. A tenant may usually remove a trade fixture used in business before the tenancy ends. Removal must be lawful, and the tenant must repair the damage. An annual crop is an emblement and is generally treated as personal property even before it is cut.
Why it matters
A sale question may look like a list of objects, but it is testing what passes with title. Classify each item before deciding who may take it.
New York scenario
A bakery tenant bolts a commercial oven to the floor for its business. It may remain a trade fixture if the tenant removes it on time and repairs the floor.
Common misconception: Do not decide from attachment alone. A built-in item can still be a trade fixture, and a lightly attached item can still be a fixture when the facts show that result.
Check your recall
Real estate is land and permanent improvements. Real property includes those things plus the legal rights of ownership.
Attachment, adaptation, intent and the relationship of the parties.
Before the tenancy ends, while following the lease and repairing any damage.
Exam rule
The bundle of rights includes possession, control, enjoyment, exclusion and disposition. Law or private restrictions can limit any one of them. Land itself has surface, subsurface and air rights. Riparian rights concern a river or stream, while littoral rights concern a lake, sea or ocean. Water reshapes boundaries in named ways. Gradual soil deposit is accretion and the added soil is alluvion, reliction exposes land as water slowly recedes, and avulsion is a sudden change that usually leaves the legal boundary where it was. A parcel may be residential, commercial, industrial, agricultural or special purpose. Land is immobile, durable, unique and usually illiquid. Its uniqueness is called nonhomogeneity. The value of its location is area preference, or situs. A homestead is an owner's primary home. Its legal protection depends on the governing law.
Why it matters
Property questions mix legal rights, physical traits and types of use. Sort the fact into the correct group before choosing an answer.
New York scenario
An owner may sell the air rights above a building while keeping the building. The sale changes one part of the ownership bundle, not the physical location of the land.
Common misconception: Owning land does not mean every possible use is allowed. Zoning, easements, deed restrictions and environmental rules can limit the bundle.
Check your recall
Possession, control, enjoyment, exclusion and disposition.
Riparian rights concern rivers and streams. Littoral rights concern lakes, seas and oceans.
It usually cannot be converted to cash as quickly as a widely traded asset.
Exam rule
Fee simple absolute is the broadest private ownership estate. A qualified or defeasible fee can end if a stated event occurs or a condition is broken. A life estate lasts for a measuring life, and the future interest is a remainder when it belongs to a third person or a reversion when it returns to the grantor. A life tenant must avoid waste that harms that future interest. Leaseholds are not freeholds. An estate for years has fixed dates, a periodic estate renews by period, and a tenancy at will has no fixed term or agreed repeating period and continues only by consent. Required notice still applies when ending it. A tenancy at sufferance is a holdover without the landlord's consent.
Why it matters
One phrase can identify the estate and the next owner. Look for a fixed term, a measuring life, a condition, a renewal period or a holdover.
New York scenario
A deed gives a home to Maya for life, then to Devon. Maya is the life tenant and Devon holds the remainder interest.
Common misconception: An estate for years can last six months. The name means a fixed term, not a term of at least one year.
Check your recall
It is fee ownership that may end when a stated event occurs or a condition is broken.
A remainder goes to a third person. A reversion returns the interest to the grantor.
A tenancy at sufferance.
Exam rule
Severalty means one legal person owns the whole. Tenants in common have separate undivided interests and no right of survivorship. Joint tenants hold survivorship. The traditional four unities are possession, interest, time and title. In New York, a grant to two or more people usually creates a tenancy in common unless joint tenancy is stated. A grant to spouses usually creates a tenancy by the entirety, and New York extends that presumption to cooperative shares with the matching proprietary lease. A grant to people who are not married but are named as spouses creates a joint tenancy instead. A joint tenant can sever that tenant's interest by a qualifying recorded instrument. Partition can divide or sell jointly held property. Community property is a different state-law system. New York is not a community-property state. Dower and curtesy are historical marital interests, not the modern New York ownership forms tested here.
Why it matters
The deed language, the owners' relationship and survivorship decide the form. Never infer joint tenancy just because the shares are equal.
New York scenario
A deed transfers a house to two unmarried buyers and says nothing about the form. New York normally treats them as tenants in common.
Common misconception: Partition ends co-ownership through division or sale. It does not create a right of survivorship.
Check your recall
One legal person owns the whole property.
Possession, interest, time and title.
Tenancy in common, unless the instrument creates another form or names them as spouses, which creates a joint tenancy.
Exam rule
A trustor creates a trust, a trustee holds and manages the property, and a beneficiary receives the benefit. A general partnership may leave general partners personally liable, while a limited partnership has at least one general partner and one or more limited partners. A joint venture is usually formed for one project. A syndicate is a group investment arrangement, not a deed form. A corporation is a separate legal person. It can own land in severalty. Partners may own through the entity or hold title as tenants in common, depending on the legal structure. A condominium buyer gets a deed to a unit and an inseparable interest in common elements. A cooperative buyer gets shares and a proprietary lease. The cooperative corporation owns the real estate.
Why it matters
Ask who holds title and what paper the investor receives. The investment label does not answer either question by itself.
New York scenario
A cooperative buyer receives stock assigned to an apartment and a proprietary lease. The buyer does not receive a deed to the apartment.
Common misconception: A condominium and a cooperative may look alike, but the ownership is different. A condominium unit is real property. Cooperative ownership is based on stock and a lease.
Check your recall
The trustor, trustee and beneficiary.
A deed to the unit and an interest in the common elements.
Shares in the corporation and a proprietary lease.
Chapter 2
Classify liens and other encumbrances, rank claims, and distinguish easements, licenses, party walls, encroachments and adverse use.
Exam rule
A lien is a money claim against property and is one type of encumbrance. A general lien may reach several assets of the debtor. Examples include a docketed judgment, some estate debts, certain franchise taxes and a federal tax lien. A specific lien attaches to named property. Property-tax, mortgage and mechanics' liens are common examples. A notice of pendency, often called a lis pendens, gives notice of a lawsuit that may affect title, possession, use or enjoyment. It is not itself a money lien. Estate and inheritance tax questions depend on the law and facts, so the label alone does not prove the reach or priority of a claim.
Why it matters
First ask whether the item is a money claim or notice of a lawsuit. Then ask whether it reaches one property or several assets.
New York scenario
A creditor dockets a judgment in the county where the debtor owns a building. The judgment may create a lien on the debtor's real property in that county.
Common misconception: A lis pendens warns later parties about pending litigation. Calling it a lien hides the difference the exam is testing.
Check your recall
A general lien may reach several assets. A specific lien attaches to identified property.
Property-tax, mortgage and mechanics' liens.
No. It gives notice that a lawsuit may affect the real property.
Exam rule
A voluntary lien is created with the owner's consent, and a mortgage is the main example. An involuntary lien arises through law, judgment or government action, which is where tax, judgment and mechanics' liens come from. An ordinary New York money judgment becomes a real-property lien when docketed in the county and generally lasts until ten years after the judgment-roll is filed, subject to statutory extensions and exceptions. Voluntary or involuntary tells how the lien began. General or specific tells what property it reaches. An encumbrance is any right or claim that can burden title, value or use. Liens are the financial kind. Easements, deed restrictions and encroachments are the nonfinancial kind. A possessory interest gives a right to possess, while a nonpossessory interest, such as an easement, gives a narrower right in another person's land.
Why it matters
A lien can carry two labels at once. Classify consent, property reach and effect on title as separate issues.
New York scenario
A buyer signs a mortgage to get a loan. The lender required it, but the lien is still voluntary because the buyer chose to grant the security interest.
Common misconception: Do not treat every encumbrance as a lien. An easement burdens land without creating a money claim.
Check your recall
The owner consents to give the lender a security interest in the property.
It describes the property that the lien can reach.
Examples include easements, deed restrictions and encroachments.
Exam rule
Priority controls the order in which claims are paid from property value. Recording time often matters, but a statute may give a lien special priority, and a subordination agreement can move one claim behind another. A purchase-money mortgage has a statutory exception when an earlier judgment is docketed against the buyer. Paying a mortgage does not clear the public record by itself. The proper satisfaction or discharge must be recorded. Under RPL §275(1), the signer of a covered discharge must arrange to present it for recording within thirty days. A deed restriction is a private limit written into a deed or another recorded instrument, and it can restrict use even though it is not a lien. Title work checks the record for liens, restrictions and proof that paid claims were released.
Why it matters
Rank claims from the facts, not memory. Check recording dates, special laws, any subordination and proof of satisfaction.
New York scenario
A seller paid a mortgage years ago, but no discharge is recorded. The closing team must obtain and record the proper satisfaction before treating the record as clear.
Common misconception: First in time is a useful starting point, not a universal answer. Tax laws, lien laws and subordination may change priority.
Check your recall
It decides the order in which claims are paid from the property's value.
It moves one claim behind another in priority.
No. The proper satisfaction or discharge must also be recorded.
Exam rule
An easement is a nonpossessory right to use another person's land. An easement appurtenant benefits a dominant parcel and burdens a servient parcel, and it usually runs with the land. Benefit can also attach to a person or a company rather than to a parcel, and that is an easement in gross. Creation comes by grant, reservation, implication, necessity, prescription or condemnation. Necessity must exist when common ownership is split. Convenience is not enough. An easement implied from prior use needs an obvious, lasting use that remains reasonably necessary. A right of way is an access easement. Light and air rights need a valid legal source, and they do not arise merely because a long-standing view happens to exist. Termination comes by written release, merger, expiration, abandonment or the end of the purpose or necessity. Transfer depends on the type and terms.
Why it matters
Ask who benefits, which land is burdened, how the right began and what event may have ended it.
New York scenario
A landlocked parcel receives access over the seller's remaining land after a parcel split. The facts may support an easement by necessity.
Common misconception: Nonuse alone may not prove abandonment. Look for conduct that shows an intent to give up the easement.
Check your recall
The dominant parcel receives the benefit. The servient parcel carries the burden.
It benefits a person or company rather than another parcel.
Examples include release, merger, expiration, abandonment and the end of necessity.
Exam rule
A license is revocable permission to use land and creates no interest in it. An encroachment is a physical intrusion across a boundary. A party wall sits on or near a boundary and serves structures on both sides. The owners' rights depend on deeds, easements, agreements and law. A prescriptive easement gives a limited use right after qualifying adverse use. Adverse possession seeks title. New York adverse possession generally requires a claim of right and possession that is adverse, open and notorious, continuous, exclusive and actual for ten years. RPAPL §501 waives the claim-of-right element in a narrow case where the record owner cannot be identified and located by reasonable means. Permission defeats the adverse element while it continues.
Why it matters
The remedy changes with the problem. Decide whether the facts show permission, a physical intrusion, a shared wall, a claimed use right or a claim of ownership.
New York scenario
A neighbor uses a driveway for years with the owner's permission. That permission points to a license and defeats a claim of hostile use during that time.
Common misconception: Adverse possession and prescription are not the same. One seeks title. The other seeks a right to use.
Check your recall
None. It is permission to use land and is generally revocable.
An encroachment is an unauthorized physical intrusion. An easement is a legal use right.
Title to the occupied land.
Chapter 3
Follow title through a valid deed, choose the correct deed form, read legal descriptions and track transfers at death or by legal process.
Exam rule
An ordinary deed conveys a present interest in real property. It names a competent grantor and an identifiable grantee, and the granting clause shows a present act of conveyance. The deed gives a legal description. It commonly recites consideration, but a valid gift does not require payment. The habendum clause explains the interest being granted, while reservations, exceptions, limits and subject-to clauses identify rights kept back or burdens that remain. The grantor or a lawful agent authorized in writing signs. Delivery with present intent and acceptance make the grant effective, and acknowledgment or the required proof allows recording. Recording protects priority against later claims. It does not replace delivery for an ordinary present-interest deed. Statutory transfer-on-death deeds have separate rules.
Why it matters
Separate three questions. Is the paper legally sufficient? Was it delivered and accepted? Was it recorded to protect priority?
New York scenario
A seller signs and acknowledges a deed but locks it in a desk and says it is not effective. Signature and notarization alone do not prove delivery.
Common misconception: Consideration in a deed need not equal the market price. A deed is not invalid merely because the transfer is a gift.
Check your recall
It shows the grantor's present act and intent to convey the property interest.
The interest or estate being granted.
Delivery with present intent and acceptance.
Exam rule
A full covenant and warranty deed gives five main promises. Under the covenant of seizin, the grantor says they own the estate being transferred and have the legal right to convey that estate to the grantee. The grantee may quietly enjoy the property, which is free from encumbrances except those disclosed in the deed. The grantor also promises further assurance and agrees to warrant and defend title. A bargain and sale deed with a covenant against the grantor promises only that the grantor did not create an encumbrance. Without that covenant, a bargain and sale deed makes no similar promise. A quitclaim deed gives no warranty. It passes only the interest the grantor has, if any. An executor's deed conveys under authority from a will, and a referee's deed carries out a court-ordered sale such as a foreclosure or partition. A deed cannot create title the grantor or authorized transferor lacks.
Why it matters
Match each deed to its promises and to the transaction that produced it. The form affects assurance, not the physical property.
New York scenario
A referee conveys property after a foreclosure sale. The referee's deed records the court-authorized transfer but does not promise perfect title.
Common misconception: A quitclaim deed is not automatically defective. It can transfer a valid interest, but it makes no promise that the grantor owns one.
Check your recall
The grantor owns the estate described and has the right to convey it.
The grantor promises that the grantor did not create an encumbrance.
For a court-authorized conveyance, such as a foreclosure or partition sale.
Exam rule
A legal description must identify the parcel with reasonable certainty. Metes and bounds follows directions and distances from a point of beginning and should return to that point, and monuments are physical reference points that may control a conflicting measurement. A lot-and-block description refers to a recorded subdivision plat. A survey locates boundaries, improvements and possible encroachments. A street address or tax number helps locate land. It should not replace the controlling description. Voluntary alienation includes a sale or gift, while involuntary alienation includes foreclosure, condemnation and some court transfers. A public grant or land patent transfers public land. Dedication transfers land or an interest for public use, shown by deed or filed plat. Accession can add property through natural or human action.
Why it matters
Description questions ask which land is being conveyed. Transfer questions ask how ownership moved. Keep location evidence and transfer method separate.
New York scenario
A subdivision deed identifies Lot 12 on a named recorded map. That is a lot-and-block description by reference to a plat.
Common misconception: A mailing address helps identify land. It is not a full legal description and may not show the exact boundaries.
Check your recall
Follow directions and distances from a point of beginning and close by returning to it.
A recorded subdivision map or plat.
Voluntary alienation results from the owner's choice. Involuntary alienation results from law or legal process.
Exam rule
A person who dies with a valid will is testate. The testator makes the will, a devise is a gift of real property, and the devisee receives it. An executor is named in the will and later authorized by the court, and probate proves the will and starts estate administration. A person who dies without a valid will is intestate. New York's descent and distribution law then identifies the distributees or heirs, and the court appoints an administrator when there is no executor able to act. Title by descent means real property passes under intestacy law. Escheat is the last resort when no lawful owner or taker exists. An executor's deed may be used when the executor has authority to sell estate property. Real-property rights can vest at death, subject to estate administration. New York also allows a revocable transfer-on-death deed under RPL §424, which needs two witnesses present together at the signing, both witnessing and signing the deed. The deed also needs acknowledgment and recording before death. Lifetime beneficiary delivery or acceptance is not required.
Why it matters
Begin with testate or intestate. Then identify the recipient, the personal representative and the legal path of transfer.
New York scenario
A New York owner dies without a will. The Surrogate's Court appoints an administrator, and EPTL §4-1.1 controls who receives the estate.
Common misconception: A will names an executor. The court gives that person authority to act. An administrator serves when a person dies without a will or no executor can act.
Check your recall
A person who receives real property through a will.
A court-appointed administrator.
No. RPL §424 waives lifetime beneficiary delivery and acceptance. The deed must meet the statutory requirements, including recording before death.
Chapter 4
Connect recording, title protection, closing participants, federal settlement rules and every cost or adjustment named in the syllabus.
Exam rule
Recording places a conveyance in the public land records and helps build the chain of title. Actual notice means a person truly knows a fact. Constructive notice means the law treats the person as knowing it, because the fact was properly recorded or otherwise legally available. New York follows a race-notice rule, so an unrecorded conveyance can lose to a later good-faith purchaser for value who has no notice and records first. A filed notice of pendency also gives constructive notice of an action affecting real property. Recording does not make a forged or otherwise invalid deed valid.
Why it matters
Draw the timeline. Mark each conveyance, notice, payment of value and recording date before deciding priority.
New York scenario
Buyer A receives a deed but does not record. Buyer B later pays value without notice and records first. New York's recording statute may protect Buyer B.
Common misconception: First to sign is not always first in priority. The later buyer must also act in good faith, pay value, lack notice and duly record first.
Check your recall
Direct knowledge of a fact.
Notice the law assigns because a fact was properly recorded or legally available.
Good faith, valuable consideration, no notice of the earlier interest and first proper recording.
Exam rule
A title search examines public records for ownership, liens and other recorded interests. The chain of title lists the linked transfers over time. An abstract of title summarizes that public-record history but is not insurance. Marketable title is title a reasonable buyer can accept without serious doubt or likely litigation. Title insurance covers specified past title defects, subject to exclusions and exceptions. A lender's policy protects the lender and usually falls with the loan balance, while an owner's policy protects the buyer up to its stated coverage and does not normally decline as the mortgage is paid. A survey and off-record inquiry can reveal matters a record search alone may miss.
Why it matters
Know what each product does. A search finds record facts, an abstract summarizes them, and insurance shifts covered risk under the policy.
New York scenario
A buyer and lender receive separate policies. Paying off the loan ends the lender's insured interest, but it does not turn that policy into protection for the owner.
Common misconception: Title insurance does not cover the building's physical condition. It also does not cover future zoning changes or items listed as policy exceptions.
Check your recall
A summary of the recorded title history. It is not an insurance policy.
The mortgage lender's insured interest.
Title a reasonable buyer can accept without serious doubt or likely litigation.
Exam rule
A title closing completes the sales contract. The buyer, seller, attorneys, lender, title closer and other needed parties each perform assigned tasks, and the location can be an attorney's office, a lender's office or another agreed place. The seller receives the balance due and existing liens are paid or cleared. The buyer uses personal funds and, when financed, acquisition-mortgage funds. The seller signs and delivers the deed, the buyer signs the note and mortgage, and the closing documents, adjustments and funds are checked. The broker or salesperson may attend the final walk-through with the buyer and must account for any money held. The commission is paid as the agreement directs. A lender normally requires homeowners insurance before funding. The deed and mortgage are then sent for recording.
Why it matters
Closing questions test sequence and responsibility. Identify the person, the document and the purpose of each step.
New York scenario
Before closing, the buyer walks through the home to confirm its agreed condition and completed repairs. This is not a new appraisal or full engineering inspection.
Common misconception: The sales contract creates duties. It does not transfer title. The deed transfers the seller's interest when it is delivered and accepted.
Check your recall
The promissory note for the debt and the mortgage that secures it.
To check the property's agreed condition and completed work shortly before closing.
A mortgage lender normally requires proof of coverage before it funds the loan.
Exam rule
RESPA and Regulation X ban kickbacks for referrals of covered settlement services. They also bar unearned splits of settlement charges. In a covered deal a seller cannot require one title insurer. Regulation Z sets the rules for the Loan Estimate and the Closing Disclosure on a covered mortgage. The creditor generally must deliver or mail the Loan Estimate within three business days after application, and the consumer must generally receive the first Closing Disclosure at least three business days before consummation. Three changes restart that wait. The APR becomes inaccurate beyond tolerance. The loan product changes. A prepayment penalty is added. A personal financial emergency may support a signed waiver under strict rules.
Why it matters
Separate referral payments, unearned fees, provider choice and disclosure timing. Each issue has its own rule.
New York scenario
A creditor receives a covered application on Monday. Its offices perform substantially all business functions on Tuesday, Wednesday and Thursday. Those days count for this deadline. It must generally deliver or mail the Loan Estimate by Thursday.
Common misconception: A fee is not lawful merely because the parties know about it. RESPA asks whether covered business was referred and whether real services earned the payment.
Check your recall
Within three business days after the creditor receives an application, delivered or placed in the mail.
At least three business days before consummation.
An inaccurate APR beyond tolerance, a loan-product change or a newly added prepayment penalty.
Exam rule
The closing statement reconciles the money due from and paid to each party. A debit is a charge to the named party. A credit is an amount in that party's favor. Seller costs often include state and local transfer taxes, commission, attorney fees, payoff of liens, documents needed to clear title and some cooperative or condominium fees. Buyer costs often include appraisal and credit fees, inspections, mortgage recording tax, title insurance, attorney and bank fees, recording charges, mortgage insurance and some cooperative or condominium fees. The contract and local law control the final allocation. Adjustments may cover taxes, assessments, insurance, fuel, water, sewer, rent and security deposits. A proration divides an item as of the agreed adjustment date.
Why it matters
Label each amount before calculating. Identify the party, the time period, who owns the day of closing and whether the item was paid in advance or arrears.
New York scenario
The seller prepaid a $7,300 annual tax bill. The contract uses a 365-day year and gives the buyer 245 days of that tax period. The daily charge is $7,300 / 365 = $20. The buyer's share is 245 x $20 = $4,900, entered as a debit to the buyer and a credit to the seller. Check the contract's adjustment date and closing-day rule before counting days.
Common misconception: A debit is not always a new cash payment, and a credit is not always cash received. Read every entry from the named party's side.
Check your recall
The charges, credits, payments and amounts due to or from each party.
It divides a recurring expense or income item between the parties for their periods of responsibility.
Examples include taxes, assessments, insurance, fuel, water, sewer charges, rent and security deposits.
Your mastery checklist
Mark a lesson only after you can explain its rule without looking. This checklist never changes your license or state-exam record. We try to save it in this browser.
0/19
lessons complete
Ready to apply a rule?
Try a question, then read the explanation behind your choice.
Free web sample
Answer one selected question at a time. These web samples are not the complete subject bank. The mobile app contains all 185 questions for Legal Issues.
Question 1 of 5
standardChoose the best answer before opening any lesson notes. Your first response is the best measure of recall.
Want a longer set or a specific concept? Open Legal Issues topic practice, or recall the rules without answer choices.
Worked examples
Choose an answer to see how the rule applies, or reveal the explanation to study the example.
1. Identify
Name the legal, financial or factual issue the question is testing.
2. Apply
Use the controlling rule. Ignore facts that do not change that rule.
3. Conclude
Choose the answer that follows the rule without adding assumptions.
Choose an answer to see how the rule applies, or reveal the explanation to study the example.
1. Identify
Name the legal, financial or factual issue the question is testing.
2. Apply
Use the controlling rule. Ignore facts that do not change that rule.
3. Conclude
Choose the answer that follows the rule without adding assumptions.
Choose an answer to see how the rule applies, or reveal the explanation to study the example.
1. Identify
Name the legal, financial or factual issue the question is testing.
2. Apply
Use the controlling rule. Ignore facts that do not change that rule.
3. Conclude
Choose the answer that follows the rule without adding assumptions.
Choose an answer to see how the rule applies, or reveal the explanation to study the example.
1. Identify
Name the legal, financial or factual issue the question is testing.
2. Apply
Use the controlling rule. Ignore facts that do not change that rule.
3. Conclude
Choose the answer that follows the rule without adding assumptions.
Choose an answer to see how the rule applies, or reveal the explanation to study the example.
1. Identify
Name the legal, financial or factual issue the question is testing.
2. Apply
Use the controlling rule. Ignore facts that do not change that rule.
3. Conclude
Choose the answer that follows the rule without adding assumptions.
Scenario lab
Scenario 1
A bakery tenant bolts a commercial oven to the floor for its business. It may remain a trade fixture if the tenant removes it on time and repairs the floor.
Land is the earth, the space above it and the rights below it. Real estate means the land and permanent improvements. Real property adds the legal rights that go with ownership. Personal property, also called a chattel, is movable. A fixture begins as personal property but becomes part of the real estate, and courts decide the question by weighing attachment, adaptation, intent and the parties' relationship. A tenant may usually remove a trade fixture used in business before the tenancy ends. Removal must be lawful, and the tenant must repair the damage. An annual crop is an emblement and is generally treated as personal property even before it is cut.
Scenario 2
A neighbor uses a driveway for years with the owner's permission. That permission points to a license and defeats a claim of hostile use during that time.
A license is revocable permission to use land and creates no interest in it. An encroachment is a physical intrusion across a boundary. A party wall sits on or near a boundary and serves structures on both sides. The owners' rights depend on deeds, easements, agreements and law. A prescriptive easement gives a limited use right after qualifying adverse use. Adverse possession seeks title. New York adverse possession generally requires a claim of right and possession that is adverse, open and notorious, continuous, exclusive and actual for ten years. RPAPL §501 waives the claim-of-right element in a narrow case where the record owner cannot be identified and located by reasonable means. Permission defeats the adverse element while it continues.
Scenario 3
The seller prepaid a $7,300 annual tax bill. The contract uses a 365-day year and gives the buyer 245 days of that tax period. The daily charge is $7,300 / 365 = $20. The buyer's share is 245 x $20 = $4,900, entered as a debit to the buyer and a credit to the seller. Check the contract's adjustment date and closing-day rule before counting days.
The closing statement reconciles the money due from and paid to each party. A debit is a charge to the named party. A credit is an amount in that party's favor. Seller costs often include state and local transfer taxes, commission, attorney fees, payoff of liens, documents needed to clear title and some cooperative or condominium fees. Buyer costs often include appraisal and credit fees, inspections, mortgage recording tax, title insurance, attorney and bank fees, recording charges, mortgage insurance and some cooperative or condominium fees. The contract and local law control the final allocation. Adjustments may cover taxes, assessments, insurance, fuel, water, sewer, rent and security deposits. A proration divides an item as of the agreed adjustment date.
Keep practicing
Use the web guide to understand the rules. Use the mobile question bank to build speed, diagnose weak areas and repeat the material until it sticks.
Keep these within reach
Open the section you need. The full outline and supporting material are here whenever you want to check a detail.
Start here
Estates and interests, including freehold and leasehold estates
Forms of ownership, trusts, and business ownership
Liens, easements, encroachments, restrictions, and other encumbrances
Deed purpose, elements, execution, delivery, and common deed types
Recording, title evidence, title insurance, and marketable title
Closing participants, documents, costs, adjustments, and prorations
Separate ownership interests from claims or restrictions against property.
Know the difference between title, a deed, and title insurance.
For closing math, identify the period, who owns the day of closing, and whether an item is paid or unpaid.
Four connected units explain interests in land, encumbrances, deeds, and the closing process. This guide covers 19 lessons with New York scenarios, common mistakes, documents, worked examples, selected web practice and direct links to the sources used.
Subject vocabulary
Open any term for a direct definition, the exam cue, a New York example, the common mix-up and links to the source material.
Exam traps
Land, real property, personal property and fixtures
Do not decide from attachment alone. A built-in item can still be a trade fixture, and a lightly attached item can still be a fixture when the facts show that result.
General liens, specific liens and notices of pendency
A lis pendens warns later parties about pending litigation. Calling it a lien hides the difference the exam is testing.
Licenses, encroachments, party walls and adverse use
Adverse possession and prescription are not the same. One seeks title. The other seeks a right to use.
Recording, actual notice, constructive notice and chain of title
First to sign is not always first in priority. The later buyer must also act in good faith, pay value, lack notice and duly record first.
Closing statements, costs, credits and prorations
A debit is not always a new cash payment, and a credit is not always cash received. Read every entry from the named party's side.
Forms and records
The exam often gives you a document and asks who uses it, what it proves or when it belongs in the transaction.
Transfers the grantor's interest when properly executed and delivered.
Exam cue: A deed is the instrument of transfer. It is not title itself.
Lists the record search, exceptions, requirements and proposed insurance coverage.
Exam cue: A title policy protects against covered title risks, not physical defects.
Shows boundaries, improvements, easements and possible encroachments.
Exam cue: A fence line is not automatically the legal boundary.
Organizes charges, credits, lender funds and the amount due from or to each party.
Exam cue: Classify each item before calculating a debit, credit or proration.
Primary sources
These are the government, statutory and other authoritative materials cited in the lessons and questions above.
12 CFR §1024.14: Kickbacks and unearned fees
Consumer Financial Protection Bureau
12 CFR §1024.16: Title companies
Consumer Financial Protection Bureau
12 CFR Part 1026: Truth in Lending, Regulation Z
Electronic Code of Federal Regulations
Real Estate Salesperson 77-Hour Curriculum
New York Department of State
Title Insurance: What You Need to Know
New York State Department of Financial Services
Bonadio v Bonadio, 200 AD3d 747 (2021)
New York State Law Reporting Bureau
Meyers v Berl, 2023 NY Slip Op 00562
New York State Law Reporting Bureau
Rhiney v Rhiney, 2026 NY Slip Op 02428
New York State Law Reporting Bureau
Simone v Heidelberg, 9 NY3d 177 (2007)
New York State Law Reporting Bureau
Abandoned Property Law §200: Escheated lands
New York State Senate Open Legislation
Civil Practice Law and Rules §212: Actions to Recover Real Property
New York State Senate Open Legislation
Civil Practice Law and Rules §5203: Priorities and Liens on Real Property
New York State Senate Open Legislation
Civil Practice Law and Rules §6501: Notice of Pendency
New York State Senate Open Legislation
Estates, Powers and Trusts Law §4-1.1: Descent and Distribution
New York State Senate Open Legislation
Estates, Powers and Trusts Law §6-2.2: When Estate in Common or Joint Tenancy Created
New York State Senate Open Legislation
Lien Law §13: Priority of Liens
New York State Senate Open Legislation
Real Property Actions and Proceedings Law §501: Adverse Possession Defined
New York State Senate Open Legislation
Real Property Law §240: Definitions and use of terms
New York State Senate Open Legislation
Real Property Law §243: Grant of a fee or freehold
New York State Senate Open Legislation
Real Property Law §244: When a grant takes effect
New York State Senate Open Legislation
Real Property Law §245: Estate that passes by grant or devise
New York State Senate Open Legislation
Real Property Law §258: Statutory forms of deed
New York State Senate Open Legislation
Real Property Law §275: Certificate of discharge of mortgage
New York State Senate Open Legislation
Real Property Law §291: Recording of Conveyances
New York State Senate Open Legislation
Real Property Law §339-g: Condominium units as real property
New York State Senate Open Legislation
Real Property Law §339-i: Common interest of a condominium unit
New York State Senate Open Legislation
Real Property Law §424: Transfer on death deed
New York State Senate Open Legislation
Real Property Law Article 8: Conveyances and Mortgages
New York State Senate Open Legislation
Real Property Law Article 9-B: Condominium Act
New York State Senate Open Legislation
RPAPL §901: Partition of real property held jointly
New York State Senate Open Legislation
Surrogate's Court Procedure Act §1001: Letters of administration
New York State Senate Open Legislation
Surrogate's Court Procedure Act §1418: Administration with will annexed
New York State Senate Open Legislation
26 USC §6321: Lien for Taxes
U.S. Government Publishing Office
Separate required course
10 of 77 course hours
New York assigns this time within its required pre-licensing course. It is not the time needed to use this exam-prep guide or mobile app.
19
lessons
185
mobile questions
5
free web samples
33
sources
Editorial record
Built from the mobile app's reviewed New York lesson and question bank, then checked against the official curriculum and cited sources.
Scope note
This guide supports exam study and issue recognition. It does not replace an approved 77-hour course or advice from an attorney, tax professional, lender, engineer, inspector or other qualified specialist.
