Chapter 5/6 Flashcards
“_______________” is a form of ownership of a freehold estate held by only one owner.
In severalty
“_______________” is a form of ownership of a freehold estate held by two or more people.
In co-ownership
“_______________” is a form of ownership of a freehold estate held by a third party for the benefit of someone else.
In trust
Why is it important for a licensee to know how a property is held?
1) when selling a property the broker must know who will be required to sign all the documents to make the transaction legal, including the listing agreement, the purchase offers, the sales contract and the deed.
2) the buyers must inform the broker as to how they wish to take the title.
What is the ownership in severalty also known as?
Sole ownership or tenancy in severalty
What happens to the estate of a deceased tenant in severalty?
It passes to the heirs by probate.
What 3 types of co-ownership are recognized in Texas?
1) tenancy in common
2) joint tenancy
3) community property
A “___________” is a fiduciary who holds and manages the estate for the benefit of another party.
A trustee
What are ways a trust can be created?
1) a deed
2) a will
3) a trust agreement
True or false: in an estate in trust, a fee owner (grantor or trustor) transfers the legal title to a fiduciary (trustee) who holds and manages the estate for another party (beneficiary).
True
This type of trust allows the trustor, during his or her lifetime, to convey title to a trustee for the benefit of a third party. The trustor charges the trustee with all necessary responsibilities for managing the property, protecting its value, and securing whatever income it may produce. The trustee may also be ordered to sell the property at a given point. The beneficiary receives all income and sales proceeds, net of the trustee’s fees.
A living trust
This type of trust allows the trustor to convey the fee estate to the trustee and to name himself or herself the beneficiary. The land trust applies only to real property, not to personal property. The agreement, or deed in trust, grants the beneficiary the rights to possess and use the property, and to exercise control over the actions of the trustee.
A land trust
These are characteristics of what type of co-ownership? Two or more owners Identical rights Interests individually owned Electable ownership shares No survivorship No unity of time
A tenancy in common or “estate in common”
True or false: No co-tenant may claim to own any physical portion of the property exclusively
True - They share what is called undivided possession or unity of possession.
What does the term “no survivorship” mean in a tenancy in common ownership?
A deceased co-tenant’s estate passes by probate to the decedent’s heirs and devisees rather than to the other tenants in common. Any number of heirs can share in the ownership of the willed tenancy.
What does the term “no unity of time” mean in a tenancy in common ownership?
It is not necessary for tenants in common to acquire their interests at the same time. A new co-tenant may enter into a pre-existing tenancy in common.
How is a “joint tenancy relationship” created in Texas?
By written agreement
What are the defining characteristics and requirements of joint tenancy?
1) unity of ownership
2) equal ownership
3) transfer of interest
4) survivorship
What ownership relationship is a property owned by two or more persons collectively?
Joint tenancy
What does “unity of ownership” in a joint tenancy ownership relationship mean?
Joint tenants hold a single title to the property.
What does “equal ownership” in a joint tenancy ownership relationship mean?
Joint tenants own equal shares in the property, without exception. If there are four co-tenants, each owns 25% of the property. If there are ten co-tenants, each owns 10%.
What does “transfer of interest” in a joint tenancy ownership relationship mean?
A joint tenant may transfer his or her interest in the property to an outside party, but only as a tenancy in common interest. Whoever acquires the interest co-owns the property as a tenant in common with the other joint tenants.
The remaining joint tenants continue to own an undivided interest in the property, less the new co-tenant’s share.
What does “survivorship” in a joint tenancy ownership relationship mean?
if a joint tenant dies, all interests and rights pass to the surviving joint tenants free from any claims of creditors or heirs.
When only one joint tenant survives, the survivor’s interest becomes an estate in severalty, and the joint tenancy is terminated. The estate will be then probated upon the severalty owner’s death.
How is a joint tenancy relationship created?
All owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession.