Chapter 4 Flashcards
main goal of real estate land use planning
to create organized and thriving communities by balancing development with preservation and ensuring wise use of land resources.
airspace
the three-
dimensional space above a
property that is owned or
controlled by the property
owner
beneficiary
the person or
entity designated to receive
the benefits of a trust,
including income, assets, or
other property held in the
trust. Beneficiaries may be
individuals, organizations, or
charities named in the trust
agreement
common
elements
parts
of a condominium or
cooperative property that are
jointly owned and shared
by all unit owners. These
may include common areas
such as hallways, elevators,
parking lots, and
recreational facilities.
community
property
legal
concept that applies to the
ownership of property acquired
by married couples in certain
states. Under community
property laws, property
acquired during the marriage is
considered jointly owned by
both spouses, regardless of
who earned or purchased
the property.
condominium
type of real
estate property where
individual units within a larger
building or complex are
individually owned, while
common areas and amenities
are shared by all unit owners.
cooperative
A cooperative, or co-op, is a
type of real estate ownership
where individuals purchase
shares in a corporation or
association that owns the
entire property. Shareholders
have the right to occupy a
specific unit within the property
under a proprietary lease.
corporation
legal entity
created under state law that
is separate and distinct from
its owners (shareholders).
Corporations can own
property, enter into
contracts, and engage in
business activities on behalf
of their shareholders.
four
unities
essential elements required
to create a joint tenancy:
unity of time, title, interest,
and possession. These
unities ensure that joint
tenants have equal rights and
interests in the property.
joint
tenancy
form of
property ownership where two
or more individuals own equal
shares of the property with the
right of survivorship. If one joint
tenant passes away, their
ownership interest
automatically transfers to the
surviving joint tenants.
land
trust
type of trust
specifically created to hold and
manage real estate assets,
such as land or real property.
Land trusts are often used to
provide privacy, asset
protection, and ease of transfer
of real estate interests.
Limited
liability
company
(LLC) is a business structure
that combines the limited
liability protection of a
corporation with the flexibility
and tax advantages of a
partnership. In real estate,
LLCs are commonly used to
own and manage properties
while shielding the owners’
personal assets from
business liabilities.
living
trust
also known as a
revocable trust or inter vivos
trust, is a trust created during
the trustor’s lifetime to hold
and manage assets for the
benefit of the beneficiaries.
Living trusts are often used to
avoid probate and provide for
the management and
distribution of assets upon the
trustor’s incapacity or death.
partition
legal process
used to divide co-owned
property among its owners
when they cannot agree on
how to use or manage the
property. It allows each co-
owner to obtain a separate
share of the property,
enabling them to sever their
co-ownership interests.
partnership
business
structure where two or more
individuals or entities join
together to operate a business
or investment venture. In real
estate, partnerships are often
formed to jointly own and
manage properties, with each
partner sharing in the profits,
losses, and responsibilities.
proprietary
lease
lease
agreement between a
cooperative corporation and
a shareholder (resident) that
grants the shareholder the
right to occupy a specific unit
within the cooperative
property. Unlike a traditional
lease, a proprietary lease
is typically long-term
and renewable.
tenancy by
the entireties
form of property ownership
available to married couples
in some states. It provides
each spouse with an
undivided interest in
the property with the right
of survivorship.
tenancy in
common
two or more individuals each
hold a distinct, undivided
share of the property. Each
owner has the right to use
and occupy the entire
property, but their ownership
interests may be unequal.
tenancy in
partnership
ownership of real property by a partnership, where multiple individuals or entities
join together to invest in and
manage the property as
partners. Each partner has a
share of ownership in the
property, and decisions
regarding the property are
typically made jointly
tenancy in
severalty
refers
to property ownership by
a single individual or entity.
In this type of ownership,
there is only one owner
who has sole control
and responsibility for
the property.
time-share
real estate
ownership arrangement where
multiple individuals share
ownership and use of a
property for a specified period,
typically vacation
accommodations. Time-share
ownership allows individuals to
purchase the right to use a
property for a specific
timeframe each year
trust
legal arrangement
where one party (the trustee)
holds and manages property
on behalf of another party
(the beneficiary). The trustee
has a fiduciary duty to
manage the trust property for
the benefit of the beneficiary
according to the terms of the
trust agreement
trustee
the person or
entity responsible for managing
the assets held in a trust and
carrying out the instructions
outlined in the trust agreement
for the benefit of the trust’s
beneficiaries. The trustee has a
legal duty to act in the best
interests of the beneficiaries
and to manage the trust
property prudently.
trustor
also known as the
grantor or settlor, is the person
who creates a trust and
transfers property into the trust
for the benefit of the
beneficiary. The trustor
establishes the terms and
conditions of the trust and may
appoint a trustee to manage
the trust property
According to the principle of the “four unities,” which elements are necessary for the creation of a joint tenancy?
Unity of time, unity of title, unity of interest, unity of possession
“four unities” principle requires:
the interests must be acquired at the same time, unity of title the interests must be acquired by the same document or instrument, unity of interest the interests must be equal, and unity of possession each tenant must have an equal right to possess the entire property
Unlike tenants in common, joint tenants
cannot will their interest to a party outside the tenancy
What type of ownership exists when three individuals hold unequal shares in a property, possess identical rights, and can transfer their shares without consent from others?
Tenancy in Severalty
Who are the essential parties involved in an estate in trust?
Trustor, trustee and beneficiary
unique features of a condominium estate
Ownership of individual units and shared ownership of common areas
In a community property state, what primary division is recognized concerning property ownership?
Separate and community property
What type of ownership is created when a fee or life estate in real property is held by a single individual or entity?
Sole ownership
What distinguishes a cooperative estate from a condominium estate in terms of ownership structure?
residents do not own their individual units. Instead, they own shares in a corporation or cooperative association that owns the entire property, including the individual units
Who holds ownership rights in a time-share estate arrangement?
Multiple individuals, each with a designated time period of ownership.
What distinguishes a land trust from other types of trusts?
It is established solely for the purpose of holding title to real estate.
Which of the following is true of a cooperative?
A cooperative may hold an owner liable for the unpaid operating expenses of other owners
