Chapter 2 Flashcards
Community Property
Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse has equal rights of management, alienation, and testamentary disposition of community property.
Joint Tenancy:
Undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship, i.e., the right to share equally with other surviving joint tenants in the interest of a deceased joint tenant.
Partition
A division of real or personal property or the proceeds therefrom among co-owners.
Tenancy by the Entireties
Under certain state laws, ownership of property acquired by a husband and wife during marriage, which property is jointly and equally owned. Upon the death of one spouse, it becomes the property of the survivor.
Tenancy in Common:
Co-ownership of property by two or more persons who each hold an undivided interest, without right of survivorship; interest need not be equal.
Tenancy in severalty
Sounds more like “several”, but this form of ownership is by one person or a corporation.
Sole ownership of a freehold estate; passes to heirs
Tenancy in common:
Is equal or unequal undivided ownership between two or more people.
If an owner dies, the deceased person’s share is conveyed to the heirs, not the other owners.
Any ownership share possible.
Joint tenancy:
Ownership by two or more with rights of survivorship.
Upon death, the shares go to surviving co-owners.
Joint tenancy overrides a will.
If one owner of a joint tenancy dies, that owner’s interest reverts to the other owners.
The four unities that must exist for this type of ownership to exist are:
Joint tenancy
Remember: “PITT” Possession All owners hold an undivided interest. Interest Each owner has the same interest. Time All owners receive their interest at the same time. Title All owners acquire their interest with the same deed
Tenancy by the entirety:
Ownership that’s available only to married couples
Property may not be sold without the agreement of both parties
Has rights of survivorship. If one spouse dies, their interest reverts to the other spouse (This is also true of joint tenancy).
Husband and wife own equal undivided interest
Now applies to same-sex couples in some states
TENANCY IN COMMON
TITLE PASSES AT PROBATE UNEQUAL INTEREST ESTATE OF INHERITANCE WILLABLE MOST COMMON
JOINT TENANCY
AVOIDS PROBATE - TITLE PASSES AT DEATH UNITY OF TIME, TITLE, INTEREST, POSSESSION LAST MAN STANDING RIGHT OF SURVIVORSHIP POOR MAN’S
NOTE:
the word “tenants” can indicate owners, as in joint tenants and tenants in common. Some special types of ownership include timeshares, condominiums, and cooperatives.
Condominium
An estate in real property wherein there is an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan.
Cooperative or “Co-ops
An apartment building, owned by a corporation and in which tenancy in an apartment unit is obtained by purchase of shares of stock of the corporation and where the owner of such shares is entitled to occupy a specific apartment in the building.
Mobile Home
A structure transportable in one or more sections, designed and equipped to contain not more than two dwelling units to be used with or without a foundation system.
Modular
A system for the construction of dwellings and other improvements to real property through the on-site assembly of component parts (modules) that have been mass produced away from the building site.
Time-Share
A form of subdivision of real property into rights to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, on an annual or some other periodic basis, for a specified period of time.
Freehold Estate
Fee Simple Absolute
ownership with the greatest bundle of rights
best type of ownership
The owner has all the available rights to the property and can always pass it to his or her heirs.
Fee simple defeasible reverts to the previous owner.
Determinable is an estate that will end automatically when the stated event or condition occurs. The interest will revert to the grantor or the heirs of the grantor
Condition subsequent an estate that terminates only upon the exercise of the power of termination, or right of reentry, for the violation of a particular condition.
Life estate
Bundle of rights
freehold estate
is ownership. All the legal rights that attach to the ownership of real property including but not limited to the right to sell, lease, encumber, use, enjoy, exclude, will to heirs, etc., are called the
Bundle of Rights
is all of the legal rights incident to ownership of property including rights of use, possession, encumbering, and disposition.
Bundle of Rights
Real Property = Real Estate + the Bundle of Rights
Fee simple defeasible also called a fee simple defeasible estate
this fee simple estate has some limitations on it. The three types of qualified fee estates are:
Fee simple condition precedent:
In this case, ownership, commonly referred to as title, won’t pass from one person to another until a particular condition is met.
Fee simple condition subsequent
This form of an estate is a situation in which the grantor (seller) can reclaim property if some condition isn’t met after title has passed to the next owner. The right to reclaim the property is known as the right of reentry.
Fee simple determinable:
In this situation, title remains with the new owner as long as any conditions of ownership are being met.
life estate
is an estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party (remainderman).
remainderman
The person who gets the property after the life estate is ended is the remainderman. If the life tenant leases the property and then dies, the lease expires.
Life estate with reversion
is a life estate is set up so that at the end of the life estate the property goes back to the original owner.
leasehold estate
the landlord holds the title to the property, while the tenant has the right to use the property. Leasehold estates may vary in the way the agreement is created, the type of property being leased and the length of time the leasehold estate exists.
estate for years
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.
periodic tenancy
s a tenancy that continues for successive periods until the tenant gives the landlord notification that they want to end the tenancy. A month-to-month lease is a periodic tenancy. A 30 days’ notice is typically required.
estate at will
or tenancy at will is a lease that can be terminated by either party at will without notice.
tenancy at sufferance
is an agreement in which a property renter is legally permitted to live on a property after a lease term has expired but before the landlord demands the tenant vacate the property. If a tenancy at sufferance occurs, the original lease conditions must be met, including the payment of any rents, otherwise, the tenant can be evicted.
Estate at Sufferance
An estate arising when the tenant wrongfully holds over after the expiration of the term. The landlord has the choice of evicting the tenant as a trespasser or accepting such tenant for a similar term and under the condition of the tenant’s previous holding. Also called a tenancy at sufferance.
Estate at Will:
The occupation of lands and tenements by a tenant for an indefinite period, terminable by one or both parties.
Estate For Years
An interest in lands by virtue of a contract of a contract for the possession of them for a definite and limited period of time that may be for a year or less. A lease may be said to be an estate for years
Leasehold Estate
A tenant’s right to occupy real estate during the term of the lease. This is a personal property interest.
Lessee
One who contracts to rent, occupy, and use property under a lease agreement; a tenant.
Lessor:
An owner who enters into a lease agreement with a tenant; a landlord.
Periodic Estate
An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year. Also called an estate from period to period.
Gross Lease
the landlord pays all the expenses of the property. The tenant pays only rent
Percentage Lease
Typically used for a shopping center, a lease where the tenant pays a base rent plus a percentage of any revenue earned while doing business on the rental premises.
Graduated Lease – a lease with scheduled rent increases often based on expected business growth.
Lease-purchase agreement
also called a lease with an option to buy – gives a tenant the right to purchase at a future date. The price is set when the agreement is negotiated.
Ground Lease –
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.
Oil and Gas Lease –
this lease gives the tenant the right to extract oil and gas from a specific property.
Net Lease
the tenant pays rent plus some of the expenses of the property.
Covenant of quiet enjoyment
a landlord is usually prohibited from entering leased property unless there is a need for maintenance, inspections, or emergency response
Right of First Refusal -
the tenant has the right to match or better any offer before the property will be sold to someone else.
Subletting is the transfer of some or all of the rights and/or leased space under a lease to another, with liability remaining with the original tenant.
assignment
is the transfer of all rights and liabilities to a new tenant under an existing lease.
Forcible entry and detainer
or an action of forcible detainer, is the legal term for eviction. This process would be used by a landlord.
Contract rent
The rental income as stipulated by the parties in a contract.
Economic rent
The rent the property could currently command on the open market. Expiration - When the lease comes to the end of the negotiated term or lease period. Termination - When the time period on a lease ends or is cut short.
Mutual rescission
When a lease is terminated by agreement of all of the parties.
Constructive eviction
Occurs when a landlord is aware of a property condition and allows deterioration to the point that the building is uninhabitable and the tenants are forced to leave
Sale-leaseback
A property owner sells a property to an investor or lender and then leases it back. Therefore, the seller occupies the property after closing.
lien
s 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.
voluntary lien
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.
involuntary lien
is created by law and can be statutory or equitable (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.
Equitable liens
come from common law and include seller (vendor) or buyer (vendee) liens.
Liens
can be specific or general. A specific lien attaches to one or more specific or named properties (Example: a mortgage). A general lien attaches to all the debtor’s property, not exempt from forced sale (Example: a judgment or IRS lien). A recording is required for a judgment to become a lien.
If a party wins a judgment and is unable to collect, that party can secure a writ of execution from the courts to enforce payment of the lien.
Property taxes are the highest priority lien
nd are an automatic unrecorded lien that will always be paid first in the event of foreclosure. This also includes any special assessments or special taxes above and beyond the general real estate tax. All other liens have priority determined by the date of recording, as the first recorded lien is the first priority lien.
Liens usually follow the “first in time, first in right” rule, which says that whichever lien is recorded first in the land records has higher priority than later recorded liens.
Accession
gives property owners the right to everything produced by their land.
Accession
is the right of an owner to an increase in his property by natural means (such as a riparian owner’s right to an abandoned river bed, rights of alluvion and reliction, etc.) or artificially, by improvements.
Reliction
is the gradual and permanent recession of water that results in dry land.
The state has the right to refuse to grant water rights.
One reason for this would be the possibility of scarcity or shortage of water.
non-navigable
(not able to be navigated on by boats) waterfront property, landowners may own to the middle of a body of water.
navigable
(able to be navigated on by boats) waterfront property, landowners own to the vegetation line. The state owns all navigable water. Generally, all water in rivers, creeks, or streams belongs to the state.
Prior Appropriation
is a theory of water law based on the idea that first in time is first in right. The first landowner to claim water rights has the exclusive right to take all the water for specific beneficial uses.
riparian and littoral
refer to water rights.
Air Rights
The rights in real property to the reasonable use of the air space above the surface of the land.
Land
The materials of the earth, whatever may be the ingredients of which it is composed, whether soil, rock, or other substance, and includes free or unoccupied space for an indefinite distance upwards as well as downwards.
Littoral:
Concerning the shore of lakes and oceans, as opposed to rivers and streams, for which the word riparian is used.
Mineral Rights:
A landowner’s right to receive a portion of the profits of any minerals that are extracted from the land.
Real Estate:
Land plus anything permanently attached to land.
Real Property:
Land, things affixed to land, appurtenances, plus the bundle of rights.
Riparian:
Belonging or relating to the bank of a river or stream. Land within the natural watershed of a river or stream.
Water rights (riparian rights or littoral rights)
The right to use water from a river/stream that borders property would be riparian rights. The right to use water from a lake or ocean would be littoral rights.
alienation
A change of ownership (transfer of property) of real property is called
Voluntary alienation
occurs when an owner transfers title to another. Voluntary alienation usually involves a written document called a conveyance.
conveyance
is a document that transfers an interest in real property. Ownership is most often transferred by deed, patent, power of attorney, or will.
Involuntary alienation
property taken against one’s will) usually happens in court as in foreclosure, bankruptcy, condemnation, escheat, adverse possession, reversion of defeasible fee, partition, or inheritance without a will. Involuntary alienation can also occur from natural causes including accretion and reliction which result in an increase in property size, and erosion and avulsion, which results in a loss of land.
Avulsion
is sudden and substantial tearing away of land by water and the deposit of said land as an addition to the land of another owner. The original boundaries apply, and ownership of the land in question remains in the original owner.
Accretion
is the gradual addition to the shore or bank of a waterway. The land generally becomes the property of the owner of the shore or bank, except where statutes specify otherwise. Alluvion is material deposited along a shore by accretion.
Partition
is a legal proceeding to divide property owned by two or more people. It can also result in the court-ordered sale of property with multiple owners unable to agree on the division, use, or sale of the property.
REQUIREMENTS OF A VALID DEED
Grantor (the current owner of the property) and Grantee (person receiving title to the property). The grantor must be legally competent and of legal age. Remember the grantor can be selling the property, exchanging it, or giving it away.
Consideration - The deed must contain words that indicate that the grantor is receiving something of value in exchange for the property. Generally, money is being received, and the consideration clause needs to state the amount.
Execution - the grantor, must sign the deed.
Delivery - title does not pass until the deed is delivered and accepted. Delivery can be into escrow.
Legal description - the wording that’s designed to leave no doubt about the exact boundaries of the property being conveyed.
Bargain and Sale Deed:
A written instrument used to transfer all of the right, title, and interest of the grantor in and to a parcel of real property to the grantee. A bargain and sale deed does not include any warranties (promises), but ownership of the property by the grantor is implied by particular granting clause language. ,”
Deed:
A written instrument which, when properly executed and delivered, conveys title to real property from one person (grantor) to another (grantee).
Grant Deed
A limited warranty deed, using the word “grant”, that assures a grantee that the grantor has not already conveyed the land to another and that the estate is free from encumbrances placed by the grantor.
Grantee
A person to whom a grant is made.
Grantor:
: A person who transfers his or her interest in property to another by a grant.
Quitclaim Deed: A deed to relinquish any interest in property that the grantor may have, without any warranty of title or interest.
Sheriff’s Deed:
A deed given by court order in connection with the sale of a property to satisfy a judgment.
Special Warranty Deed
A deed in which the grantor warrants or guarantees the title only against defects arising during the grantor’s ownership of the property and not against defects existing before the time of the grantor’s ownership.
Voluntary Alienation
ransfer of title to an asset with the consent of the owner.
Warranty Deed
A deed used in many states to convey fee title to real property. Until the widespread use of title insurance, the warranties by the grantor were very important to the grantee. When title insurance is purchased, the warranties become less important as a practical means of recovery by the grantee for defective title.
General Warranty Deed -
is a deed used to legally transfer real property from one person to another. This type of deed offers the most protection for the buyer.
Special Warranty Deed
A special warranty deed is a deed to real estate where the seller of the property—known as the grantor—warrants only against anything that occurred during their physical ownership. In other words, the grantor doesn’t guarantee against any defects in clear title that existed before they took possession of the property.
