Real Estate Appraisal Practice Exam

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Prepare for the Real Estate Appraisal Exam with tailored questions and explanations. Boost your knowledge and confidence to succeed in your appraisal exam!

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In terms of encumbrances, what's a license?

Permission without possession, interest, or ownership.
A legal claim against a property.
A type of contractual agreement.
An ownership right granted by the government.

The correct answer is: Permission without possession, interest, or ownership.

A license, in the context of real estate and encumbrances, refers to permission granted by one party to another to use their property for a specific purpose without transferring any ownership rights. This means that while someone may have the right to use the property, they do not hold any possessory interest in it, nor do they acquire any ownership status. This type of arrangement is often temporary and can be revoked at any time by the property owner. Licenses are quite distinct from more formal legal encumbrances, such as easements or mortgages, which typically convey an ongoing interest or claim against the property. The idea that a license does not confer ownership rights or a possessory interest is crucial for understanding its role and limitations within property law.