Chapter 4 - Ownership

Question 1

Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is…

Answer 1

tenancy in common

Question 2

A unique feature of a land trust is that…

Answer 2

the identity of the beneficiary may not be identified

Question 3

A _____ may hold an owner liable for the unpaid operating expenses of other owners

Answer 3

cooperative

Question 4

One of the benefits offered by ownership in tenancy by the entireties is

Answer 4

the estate is subject to foreclosure only for jointly incurred debts

Question 5

When a tenant in common dies, what happens to the tenant’s interest in the estate?

Answer 5

It passes by probate to the deceased tenant’s heirs.

Question 6

The owner of a cooperative owns

Answer 6

shares in a corporation or association and a proprietary lease in a physical unit

Question 7

In a cooperative, real property is owned by

Answer 7

the corporate entity of the cooperative association

Question 8

A tenant in common can

Answer 8

sell, encumber, or transfer his or her interest to an outside party without the consent of the other tenants in common

Question 9

Sole ownership

Answer 9

a single party owns the fee or life estate, the ownership is a tenancy in severalty

aka: ownership in severalty, estate in severalty

Question 10

Co-ownership

Answer 10

if more than one person, or legal entity such as a corporations, owns an estate in land, the estate is held in some form of co-ownership

co-owners are also called cotenants

Question 11

Tenancy in common

Answer 11

also known as the state in common, is the most common form of co-ownership when the owners are not married

Question 12

Defining characteristics of a tenancy in common

Answer 12

-two or more owners
-identical rights - co-tenants share an indivisible interest in the estate
-interests individually owned - co-tenants may sell, encumber, or transfer their interests without obstruction or consent from the other owners
-Electable ownership shares - tenants in common determine among themselves what share of the estate each party will own (40/25/35 or 50/25/25)
-no survivorship - a deceased co-tenant’s estate passes by probate to the decedent’s heirs
-no unity of time - a new co-tenant may enter into a pre-existing tenancy in common

Question 13

Joint tenancy

Answer 13

two or more persons collectively own a property as if they were a single person.

rights and interests are indivisible an equal: each has a shared interest in the whole property which cannot be divided up

Question 14

Defining characteristics of a joint tenancy

Answer 14

-unity of ownership - hold a single title to the property
-equal ownership (50/50; 25/25/25/25)
-transfer of interest - joint tenant may transfer their interest in the property to an outside party, but only as a tenancy in common
-survivorship-if a joint tenant dies, all interests and rights pass to the surviving joint tenants

Question 15

Creation of joint tenancy

Answer 15

all owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession

Question 16

What are the four unities of joint tenancy

Answer 16

unity of time, unity of title, unity of interest, unity of posession

Question 17

Termination by partition suit

Answer 17

the legal avenue for an owner who wants to dispose of his or her interest against the wishes of other co-owners

Question 18

Tenancy by the entireties

Answer 18

is a form of ownership traditionally reserved for married couples

Question 19

Characteristics of a tenacy by the entireties

Answer 19

-survivorship - upon death the interest passes automatically to the other spouse
-equal, undivided interest
-no foreclosure for individual debts
-termination - may be terminated by divorce, death, mutual agreement

Question 20

Community property

Answer 20

defines property right of legal spouses before, during and after their marriage as well as after the death of either spouse

Question 21

Community property law distinguishes real and personal property into

Answer 21

separate and community property

Question 22

Separate property consists of

Answer 22

-property owned by either spouse at the time of marriage
-property acquired by either spouse through inheritance or gift
-property acquired with separate-property funds
-income from separate property

Question 23

Community property consists of

Answer 23

all other property earned or acquired by either party during the marriage

Question 24

Tenancy in partnership

Answer 24

ownership held by business partners, as provided by the uniform partnership act

Question 25

Estate in trust

Answer 25

a fee owner (grantor or trustor) transfers legal title to a fiduciary (the trustee) who holds and manages the estate for the benefit of another party, the beneficiary

Question 26

Living trust

Answer 26

allows the trustor, during their lifetime, to convey title to a trustee for the benefit of the third party

Question 27

Testamentary trust

Answer 27

is structurally and mechanically the same as a living trust, except that it takes effect only when the trustor dies

Question 28

Land trust

Answer 28

a land trust allows the trustor to convey the fee estate to the trustee and to name himself or herself the beneficiary

Question 29

Deed in trust

Answer 29

grants the beneficiary the rights to possess and use the property, and to exercise control over the actions of the trustee

Question 30

Conventional trust structure

Answer 30

the trustee holds legal title and has conventional fiduciary duties

Question 31

Distinguishing features of a land trust

Answer 31

-beneficiary controls property -beneficiary controls trustee -beneficiary identity not on record -limited-term (must be renewed)

Question 32

The beneficiary's interest in a land trust is

Answer 32

personal property, not real property

Question 33

Corporation

Answer 33

is a legal entity owned by stockholders

Question 34

Partnership

Answer 34

two or more persons agree to work together and share profits

Question 35

LLC

Answer 35

limited liability company, combines features of the corporation and the limited partnership

Question 36

Condominium ownership

Answer 36

a hybrid form of ownership of a multi-unit residential or commercial properties it combines ownership of a fee simple interest in the airspace within a unity with ownership of an undivided share, as a tenant in common, of the entire property's common elements, such as lobbies, hallways, and pools

Question 37

A condominium unit

Answer 37

is one airspace unit together with the associated interest in the common elements

Question 38

Common elements

Answer 38

are all portions of the property that are necessary for the existence, operation, and maintenance of the condo units

Question 39

Common elements include

Answer 39

-the land -structural components of the building -physical operating systems -recreational facilities -building and ground areas used non-exclusively (halls, stairways, laundry rooms)

Question 40

Condominium interests and rights

Answer 40

-possession, use an exclusion - unit owners exclusively posses their apartment space, but must share common areas with other owners -transfer and encumbrance - condo units can be individually sold, mortgaged, or otherwise encumbered without interference from other unity owners -condo units are individually taxed

Question 41

Condominium creation

Answer 41

condo properties are created by excuting and recording a condo declaration and master deed the party creating the declaration is referred to as the developer

Question 42

Condo declaration may be required to include:

Answer 42

-a legal description/ name of property -a survey of land, common elements, and all units -plat maps of land and building, floorplans -provisions for common area easements -an identification of each unit's share of ownership -voting rights, membership status, and liability for expenses of individual owners -covenants and restrictions regarding uses and transfer of units

Question 43

Condo organization

Answer 43

condo declarations typically provide for the creation of an owner's association to enforce bylaws and manage the overall property

Question 44

Condo management

Answer 44

have extensive management requirements, including maintenance, sales and leasing, accounting, owner services, sanitation, security, trash removal, etc..

Question 45

Condo owner responsibilities

Answer 45

-maintaining internal systems -maintaining the property condition -insuring the contents of the unit

Question 46

Cooperative ownership

Answer 46

or co-op one owns shares in a non-profit corporation or cooperative association, which in turn acquires and owns an apartment building as its principal asset. the shareholder acquires a proprietary lease

Question 47

____ establishes what portions of the property's expenses the owner must pay

Answer 47

the ratio of the unit's value to total value

Question 48

Co-op interests, rights and obligations

Answer 48

co-op association's interest - the corporate entity of the co-op association is the only part in the co-op with real property interest -shareholder's interest - owning stock and a lease, the unit is personal property that is subject to control by the corporation -proprietary lease - the co-op lease is called a proprietary lease because the tenant is an owner (proprietor) of the corp that owns the property -expense liability - failure of individual shareholders to pay monthly expense easements puts all proprietors on the hook -transfer - interest is transferred by assigning both the stock certificate and lease to the buyer

Question 49

Co-op organization and management

Answer 49

a developer creates a cooperative by forming the cooperative association, which subsequently buys the cooperative property cooperative associations control the use and ownership of individual apartment units.

Question 50

Time-share ownership

Answer 50

is a fee or leasehold interest in a property whose owners or tenants agree to use the property on a periodic, non-overlapping basis

Question 51

Time-share lease

Answer 51

(lease hold time share) the tenant agrees to rent the property on a scheduled basis or under any pre-arranged system of reservation, according to the terms of the lease

Question 52

Time-share freehold

Answer 52

or interval ownership estate, tenants in common own undivided interest in the property