Chapter 5 - Forms of Real Estate Ownership Flashcards
**Ownership is SEVERALTY (sever = 1) occurs when property is owned by one individual, corporation or other entity. The term comes from the fact that that a sole owner is SEVERED or…..
Cut Off from other owners. The owners in severalty has the sold rights to the property and sole discretion to see, will, lease, or otherwise transfer part of all of the ownership rights to another person.
**When title to a parcel of real estate is held by TWO or more individuals, those parties are called…
CO-OWNERS or CONCURRENT OWNERS. Individuals may co-own property as TENANTS IN COMMON or JOINT TENANTS.
**The 4 forms of Co-Ownership are:
TENANCY IN COMMON (TIC)
JOINT TENANCY
TENANCY BY THE ENTIRETY
COMMUNITY PROPERTY
**What is TENANCY IN COMMON (TIC)?
Each tenant holds an UNDIVIDED INTEREST in the property. The co-owners have UNITY OF POSSESSION, meaning that each owner is entitled to possession and use of the ENTIRE property, even though each holds only a fractional ownership interest. The ownership interest, not the property is what’s divided. (no right of survivorship)
No individual tenant may transfer the ownership of the entire property - only what they own percentage-wise.
**What is JOINT TENANCY?
The distinguishing feature of a joint tenancy is the RIGHT OF SURVIVORSHIP. Upon the death of a joint tenant, (could be husband or wife) the deceased’s interest transfers directly to the surviving joint tenant(s). ESSENTIALLY, THERE IS ONE less owner.
The last survivor takes title in SEVERALTY and has all the rights of sole ownership including the right to pass the property to any heirs.
**The FOUR UNITIES NECESSARY to create a JOINT TENANCY may be remembered as PITT. What does PITT stand for?
**POSSESSION - Unity of possession - all joint tenants hold an undivided right to possession
INTEREST - Unity of interest - all joint tenants hold an equal ownership interest.
TIME - Unity of time - all joint tenants acquire their interest at the same time.
TITLE - Unity of title - all join tenants acquire their interests by the same document.
A Joint Tenancy is destroyed when any one of the four unities of joint tenancy is terminated. This means that a new owner cannot be a joint tenant, but instead is a….?
TENANT IN COMMON.
**A special form of co-ownership used in some states that allows a spouse to inherit the other spouse’s ownership interest upon death is called?
TENANCY BY THE ENTIRETY
the term ‘entirety’ refers to the fact that the owners are considered ONE indivisible unit. BOTH have 100% ownership. They HAVE the right of survivorship.
** COMMUNITY PROPERTY laws are based on the idea that spouses, rather than merging into one entity are_________
EQUAL PARTNERS in the marriage.
Any real or personal property ACQUIRED DURING a marriage (by either spouse) is considered to be obtained by mutual effort. (9 states) Any conveyance or encumbrance of community property requires the signatures of BOTH spouses.
It does NOT provide the automatic right of survivorship that joint tenancy does.
** SEPARATE PROPERTY is…
real or personal property that was owned SOLEY by either spouse BEFORE the marriage, acquired by gift or inheritance by ONE spouse DURING the marriage, or purchased with separate funds during the marriage. It stays separate. (signed by only 1 spouse)
***A partnership tat consists of one or more general partners, as well as ______ partners is called a?
LIMITED PARTNERSHIP.
** It takes a security license to sell limited partnerships.
the business is run by the general partner or partners. the limited partners are not legally permitted to participate with the results that each can be held liable for business losses only to the amount invested.
A TRUSTEE is…
One to whom something is entrusted and who holds legal title to property and administers the property for the benefit of a beneficiary.
