Certified Residential Appraiser Practice Exam

What is described as divided or undivided rights in real estate that represent less than the whole?

1. Lease fee interest

2. Easement appurtenant

3. Partial interest

4. Negative easement

The correct answer is: Partial interest

The concept of divided or undivided rights in real estate that represent less than the whole is best described as partial interest. This term specifically refers to a situation where an individual holds ownership rights in a property but does not hold the entire bundle of rights associated with that property. For example, a person may own a fractional interest in a property or may be co-tenants who do not have complete ownership of the entire estate. Partial interest can arise from various circumstances, such as joint ownership, tenancy in common, or other arrangements where individuals share ownership but hold specific rights or interests that do not encompass full ownership control. This recognition is critical in appraising properties as it affects the valuation, usage rights, and economic benefits derived from the property. In contrast, lease fee interest relates to the owner's rights under a leasehold arrangement, where the ownership is tied to the leasehold estate rather than a complete estate. An easement appurtenant represents a right that benefits another property and typically does not fit the description of divided or undivided rights within a single ownership context. A negative easement grants a right against the property owner to restrict the use of their property but also does not encapsulate the broader interpretation of partial interest.