Tennessee Realtor State Practice Exam

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What kind of release is typically needed when transferring property from a developer to a new buyer in a subdivision?

Partial release.
Full release.
Equitable release.
Judicial release.

The correct answer is: Partial release.

In the context of transferring property from a developer to a new buyer in a subdivision, a partial release is often required. This type of release allows a developer to free a specific parcel of land within a larger property that is encumbered by a mortgage or other liens. When a developer is selling individual lots within a subdivision, they typically have a blanket mortgage on the entire subdivision. A partial release is then used to separate the new buyer's lot from that larger mortgage obligation, ensuring that the buyer receives clear title to their specific property while the developer retains the responsibilities for the unsold lots. This process is essential for protecting the interests of both the buyer and the lender, as it ensures that the new homeowner has an unencumbered interest in their specific lot. Other release types, such as a full release, which would release the entire property from obligations, or equitable and judicial releases, which pertain to different legal contexts, do not specifically address the needs of subdividing and selling individual lots within this scenario.