A-2 Real Estate Interests and Ownership Flashcards
The degree quantity, nature and extent of ownership interest that a person has in real property. It refers to one’s legal position of ownership, not to the amount of property owned.
Estate
Property ownership and indeterminate duration. Fee estates (inheritable), and life estates (not inheritable)
Freehold Estates
(leasehold) estates, where tenants such as renters possess (occupy) but do not own property.
Less than free hold
There are two under this category: Fee simple absolute, and fee simple defeasible
Fee Estates
Property is wholly owned, transferable and inheritable. It is the most common and complete form of ownership.
Fee simple absolute
Stipulations in the deed that if not adhered to by the grantee, can result in the property reverting tot he original grantor Two forms: Fee determinable, and fee conditional
Fee simple defeasible. (two forms)
( usually regarding person… if person x never spends a day in jail) If stipulation is violated, that person’s ownership of the estate is automatically terminated and reverts to the grantor or his/her heirs.
Fee determinable
The wording of the deed controls the function of the property and is tied to a specific condition or event. (If condition is violated reversion would require the grantor to initiate a court action)
Fee Conditional
Limits heirs to lineal descendants (not in Arizona)
Fee tail
Include real and personal property. Ordinary (conventional), and statutory.
Life estates
Limited in duration to the life of its owner or to the life of some other designated person.
Ordinary (conventional) Life estate
Dower, curtesy, community property, and homestead
Statutory Life Estate
Spouses share an equal interest in property acquired during marriage.
Community property
Owned an occupied as principal interest, and protects up to 150,000 of property equity. Protects against unforeseen liens, judgments, or bankruptcy, and may prevent the home from being sold out from underneath them.
Homestead
a tenant possesses a leasehold estate and the landlord possesses a reversionary fee estate.
Less than freehold estates (leasehold)
What are the four types of leasehold estates
- Estate for years 2. Estate from period to period 3. Estate at will 4. Estate at sufferance
Estate for years
Runs for a specific time period
Estate from period to period
Runs for an indefinite number of periods (usually 30 day increments)
Estate at will
Runs for as long as the lessor and lessee will it. Either party may cancel at will
Estate at sufferance
Runs until the landlord takes action. This scenario usually involves a tenant in arrears who refuses to leave.
What is required for a valid lease 5 Things:
Lessor’s Signature, the landlord intent to “let and demise”, the time period of occupancy, the consideration (amount for rent), and the landlords right of reversion.
Gross Lease
Landlord pays all taxes, assessments and operating costs . (apartments)
Net Lease
Landlord keeps all the rent while tenants pay overhead. (generally long term)
Percentage leases
Tenants pay a base rent against a percentage of their gross sales. (usually figured monthly)
