Certified Residential Appraiser Practice Exam

In the context of real property rights, what does the term "escheat" refer to?

1. Return of property to the government when an owner dies without heirs

2. The right of government to regulate the use of property

3. A type of lease agreement

4. The process of transferring property ownership

The correct answer is: Return of property to the government when an owner dies without heirs

The term "escheat" specifically refers to the situation in which property reverts to the state when an individual dies without leaving any heirs or if the property owner abandons the property. This legal principle serves to ensure that property does not remain ownerless and helps prevent the stagnation of real estate, allowing the government to take control and ultimately manage or allocate the property according to state laws. The concept of escheat underscores the importance of having heirs or beneficiaries designated in estate planning, as failure to do so will result in the property being absorbed into the public domain. This mechanism acts as a safeguard for managing unclaimed property, aligning with the government's interest in maintaining oversight of land ownership. In contrast to this understanding, the other options represent different facets of property rights and obligations, such as regulatory authority over property use, lease agreements, or the transfer of property ownership, which do not encapsulate the specific intention of escheat.