Nationwide Mortgage Licensing System (NMLS) Practice Exam

The most comprehensive form of ownership is:

1. Real Estate Investment Trust

2. Fee simple absolute

3. Tenants in common

4. Joint tenancy

The correct answer is: Fee simple absolute

The most comprehensive form of ownership is fee simple absolute because it represents the highest level of ownership interest that one can have in real property. When an individual holds property in fee simple absolute, they have full and unrestricted rights to the property. This includes the right to use the property, the right to sell it, the right to lease it, and the right to pass it on to heirs. In contrast to other forms of ownership, fee simple absolute is not conditional or limited by any specific terms. It is not subject to any future interest or limitation, which means the owner retains complete control over the property indefinitely, as long as they comply with applicable laws. This unencumbered nature of ownership provides the owner with the greatest amount of security and flexibility regarding the use and transfer of the property. Real Estate Investment Trusts, tenants in common, and joint tenancy each involve different rights, limitations, or co-ownership arrangements that do not grant the same full, unrestricted ownership rights as a fee simple absolute. For example, tenants in common hold undivided interests in the same property but can have varying ownership percentages, which can lead to complexities in selling or transferring interests. Joint tenancy includes rights of survivorship, but this can limit how an owner