Certified Residential Appraiser Practice Exam

What specifies the duration of a periodic estate?

1. Fixed term with no notice required.

2. Defined by the term of payment of rent.

3. Bound to governmental regulation.

4. Dependent solely on tenant's preference.

The correct answer is: Defined by the term of payment of rent.

The duration of a periodic estate is indeed defined by the term of payment of rent. A periodic estate is a type of lease that continues for successive periods until terminated by either party. The rental payment schedule—whether it’s weekly, monthly, or yearly—determines how long the lease lasts. Each payment period signifies a new term, and as long as rent is paid timely, the lease renews itself automatically for the next period. This characteristic distinguishes it from other types of estates, where a fixed term or specific regulations may govern the duration independently of payment. The other options do not accurately reflect how the duration of a periodic estate is established. For instance, a fixed term with no notice required refers to a tenancy for a specific duration, not a periodic estate, which relies on regular payment intervals. Governmental regulation can impose certain requirements on leases but does not inherently define the duration of a periodic estate. Lastly, dependence solely on tenant's preference would lack the necessary structure and legal obligations typically associated with lease agreements, specifically eliminating the reliance on scheduled rent payments that define periodic estates.