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Exam Prep > CH 2 Ownership, Estates, Rights and Interest > Flashcards

CH 2 Ownership, Estates, Rights and Interest Flashcards

1
Q

estate in severalty

A

tenancy in severalty, or sole ownership.
This can be ownership by one individual or one business entity such as a corporation or a
partnership. Corporations or Partnerships often hold title this way. If only one signature is
required to sell a piece of property, then there is only one owner.

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2
Q

tenancy in common

A

Ownership by two or more without rights of survivorship

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3
Q

joint tenancy

A

Ownership by two or more with rights of survivorship

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4
Q

Tenancy by the entirety

A

is a specific type of joint tenancy where the co-owners are married
to one another: husband/wife, spouse/spouse. One advantage of this type of ownership is
that it avoids probate. (This is also true of joint tenancy.)

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5
Q

Time Shares

A

give an individual part ownership of a property coupled with the right to exclusive use
of it for a specified number of days per year, without the responsibility of full ownership. This can be
called “interval ownership.” It is tenancy in common ownership. This is most often used for resort
or vacation properties.

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6
Q

Cooperative or “Co-ops”

A

are an investment for residents. The land and buildings are owned by a
corporation. Residents must buy shares in the corporation in exchange for a “proprietary lease” on
their unit. The corporation pays for the mortgage, property taxes, and maintenance of the building.
The residents have a personal property interest in their units and the common areas.

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7
Q

Condominiums

A

are established under laws referred to as horizontal property acts. Each unit is a
separate legal ownership, and each owner arranges his or her own financing. Along with unit ownership comes a tenancy in common interest in all the common areas. Property taxes are assessed on
each unit separately and are based on the assessed value of the unit plus the share of the common
areas. It is not necessary for the taxing authority to assess and tax the common areas separately.
Monthly condominium fees are not for taxes. They pay for the maintenance of the complex and the
salary of the manager. Condominium managers work for resident owners, and their main responsibility is to preserve property value

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8
Q

freehold estate

A

is ownership

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9
Q

All the legal rights that attach to the ownership of real property

A

Bundle of

Rights. Disposition, exclusion, possession, quiet enjoyment

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10
Q

disposition

A

the right to sell, will to heirs, encumber or lease

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11
Q

exclusion

A

the right to exclude others

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12
Q

possession

A

the right to use, enjoy, occupy

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13
Q

quiet enjoyment

A

the right to use uninterrupted by former owners

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14
Q

Fee simple defeasible

A

is ownership with conditions or terms, which, if violated, could cause the
ownership interest to be defeated or terminated. When the ownership is defeated, it reverts or goes
back to the original grantor or the grantor’s heirs

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15
Q

life estate

A

is ownership for the duration of someone’s life. The owner is called the life tenant.
The life tenant has all the rights and duties of an owner, except the right to choose who will get the property upon his or her death

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16
Q

remainderman

A

The person who gets the property after the life estate is ended is the

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17
Q

a life estate with reversion

A

If the life estate is set up so that at the end of the life estate, the property goes back to the original
owner

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18
Q

life estate

pur autre vie.

A

If the life estate is based on the life of someone other than the life tenant, this is called a

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19
Q

Lease agreements create the leasehold estate

A

the lease is personal property, but the right to possession that the lease gives is real property. There are four leasehold estates, and each gives possession
without ownership. estate for years, periodic tenancy, estate at will, tenancy at sufferance

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20
Q

estate for years

A

is a lease with a specific starting and ending date. This lease survives
death and/or the sale of the property. No notice is required to terminate.

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21
Q

estate at will

A

or tenancy at will is a lease that can be terminated by either party at will
without notice

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22
Q

tenancy at sufferance

A

occurs when a lease expires, and the tenant refuses to move out

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23
Q

periodic tenancy

A

y is a lease with a fixed period that is automatically renewed unless the
tenant or landlord acts to terminate it. A month-to-month lease is this type. Notice to
terminate is usually required, typically 30 days’ notice

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24
Q

Gross Lease

A

the landlord pays all the expenses of the property. The tenant pays only rent

25
Q

Net Lease

A

the tenant pays rent plus some of the expenses of the property.

26
Q

Percentage Lease

A

lease in which all or part of the rent amount is based on the receipts of the
tenant’s business (Typical shopping center lease). This lease allows the landlord to participate in the
tenant’s success

27
Q

Graduated Lease

A

– a lease with scheduled rent increases often based on expected business growth

28
Q

Lease with an option to buy

A
  • gives a tenant the right to purchase at a future date. The price is set
    when the agreement is negotiated. It is advantageous to the tenant-buyer
29
Q

Lease purchase agreement

A

an agreement in which part of the rent payment is applicable toward a
set purchase price. Title is transferred from lessor to lessee when the lessor receives the prearranged
total price.

30
Q

Ground Lease

A

the tenant is usually making a long-term commitment, up to 99 years. This lease
is more often for industrial or commercial land use. The tenant will build on the leased property

31
Q

Oil and Gas Lease

A

this lease gives the tenant the right to extract oil and gas from a specific property. NOTE: On a federal level, for the National portion of the exam, the EPA will be the best
answer for any questions regarding what department of the government regulates oil and gas leases.

32
Q

Lien

A

is a charge against property as security for a debt. The lien is an encumbrance – a limit on
your rights. It is also, usually, a cloud on the title. This means title cannot be conveyed or transferred
to another until the lien is removed. The legal method of removing an encumbrance is to release it
or get a release.

33
Q

Specific lien

A

A specific lien attaches to one or more specific or named properties
(Example: a mortgage)

34
Q

General lien

A 
A general lien attaches to all the property of the debtor, not exempt from 
forced sale (Example: a judgment or IRS lien)
35
Q

voluntary lien

A

is created by the lienee’s or borrower’s actions, like taking out a mortgage or home
improvement loan. Filing or recording the mortgage creates a lien. A mortgage is not effective or
enforceable until it is recorded. When the mortgage is recorded, if it is the first recorded claim, it
will be the first priority lien

36
Q

involuntary lien

A

is created by law and can be statutory or equitable (common law). (NOTE:
Statutory law always takes precedence over common law.) Examples of statutory liens include federal
tax liens, ad valorem (according to value) tax liens, judgment liens, and mechanics and materialmens’
(m&m) liens

37
Q

Voluntary alienation

A

occurs when an owner transfers title to another. Voluntary alienation usually
involves a written document called a conveyance. A conveyance is any instrument or document that
transfers an interest in real property. Ownership is most often transferred by deed, patent, power of
attorney, or will.

38
Q

Involuntary alienation

A

usually happens in court as in foreclosure, bankruptcy, condemnation,
escheat, adverse possession, reversion of defeasible fee, partition, or inheritance without a will

39
Q

Types of deeds include:

A

General Warranty Deed, Special Warranty Deed, Bargain and Sale Deed, Quitclaim Deed,

40
Q

General Warranty Deed

A

guarantees and protects against defects. It offers the buyer the best
protection. It warrants title to the sovereignty of the soil. It is the most common deed. A buyer
who wishes to ensure that the seller is conveying good title should request a General Warranty
Deed.

41
Q

Special Warranty Deed

A

guarantees title only against defects arising under the grantor’s
period of ownership. Defects existing before that time are not covered.

42
Q

Bargain and Sale Deed

A

a deed with only one covenant. (Trustees, executors, sheriffs, and
officers of the court use this.) This deed does not provide any warranties about the condition
of the title but only promises the grantor has the right to convey the title.

43
Q

Quitclaim Deed

A

a deed that gives NO warranties or guarantees and offers the least protection. It is used to clear a cloud on the title or to cure a defect in tit

44
Q

The covenant of seizin

A

the grantor claims to be the owner with the right to sell the property

45
Q

The covenant of quiet enjoyment

A

the grantor promises the new owner will not be disturbed with claims against the property

46
Q

The covenant of further assurance

A

the grantor is responsible for any documentation

needed to ensure title is transferred to the grantee

47
Q

The covenant against encumbrances

A

– the grantor promises that all encumbrances have

been disclosed

48
Q

The covenant of warranty forever

A

the grantor’s promises have no expiration date.

49
Q

dedication

A

When a developer turns over

the streets in a subdivision to the local government

50
Q

WILL:

A

WILL:

TESTATE

EXECUTOR

TITLE BY DEVISE

BENEFICIAR

51
Q

NO WILL:

A

NO WILL:

INTESTATE

ADMINISTRATOR

LAWS OF DESCENT AND
DISTRIBUTION

TITLE BY DESCENT

52
Q

probate

A

The judicial process to prove or confirm a will or to settle the estate of a party who dies intestate

53
Q

deed in lieu of foreclosure

A

is deed in lieu of foreclosure. This is sometimes called “friendly foreclosure” or “voluntary deed.” The lender accepts a deed from the borrower. The lender must also
accept any junior liens on the property. This would be the fastest way for the lender to get title to
the property

54
Q

Redemption

A

At any time up to the moment of the foreclosure, the borrower has the right to step
in and pay what is owed and reclaim property forfeited due to mortgage default. This is his or her

55
Q

The lender must

send the notice of foreclosure by certified mail __ days before the foreclosure sale

A

21, There is no
requirement that the borrower receive the notice, only that the lender sends it. The notice of foreclosure must be posted at the door of the county courthouse and filed in the County Clerk’s office.
With a traditional mortgage (not a Deed of Trust), the foreclosure will be recorded as a lis pendens.

56
Q

Short Sale

A

A sale of secured real property that produces less money than is owed the lender

57
Q

subrogation clause

A

This clause allows the title company to
assume the rights of a buyer with respect to any claim against a seller if the title company has
made payments to that buyer to satisfy that claim. The property owner cannot collect from
both the title company and the seller for one problem

58
Q

chain of title

A

a list of

all owners from the first until today

59
Q

abstract of title

A

An abstract is a complete history of title

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