Chapter Five - Methods of Ownership Flashcards
1
Q
METHODS OF OWNERSHIP
A
- Severalty
- Concurrent
2
Q
Severalty Ownership
A
- Sole ownership.
- Ownership is separate and apart from the interest of any other person.
3
Q
Concurrent Ownership
A
- Tenancy In Common
- Joint Tenancy
- Tenancy by the Entirety
4
Q
Tenancy In Common
A
- Ownership held my tow or more people.
- No right of survivorship.
- Holds an estate by separate and distinct title.
- No exclusive possession.
- Any party is free to sell interest.
- Mortgage of one party is only a lien on mortgagor’s interest.
5
Q
Joint Tenancy
A
- Interest with survivorship rights.
- Cannot be passed to heirs of a descendant due to survivorship rights.
- Can only be created through direct action of the parties on the deed.
- Requires the Four Unities.
- Can mortgage interest but foreclosure severs joint tenancy.
- A tenant may sell but it will break the joint tenancy.
- A will by one tenant does not break a joint tenancy due to the right of survivorship.
- An easement does not break a joint tenancy but dies with the with the joint tenant granting it.
- Partition is the legal proceedings by which an estate held by tenants in common or joint tenants break their estates and title in severalty given to each of the previous owners.
- Legal action to enforce the claims of a creditor must be instituted during the lifetime of the debtor-joint tenant. After death, creditors lose their rights because any surviving owners take the property free from claims.
6
Q
4 Unities of Ownership
A
- Time: title must be taken at the same time.
- Title: tenants acquire their interests by way of the same title.
- Interest: must have equal ownership interests.
- Possession: tenants are entitled to the same undivided possession of the entire property.
7
Q
Tenancy by the Entirety
A
- Same as Joint Tenancy except the owners must be husband and wife.
- Differences:
- A creditor of one spouse cannot force the sale of the property.
- A creditor of both spouses can force the sale of the property.
- Neither spouse can alter the ownership rights of the other WITHOUT CONSENT.
- Survivorship CANNOT be defeated.
- Automatically created when a deed is convery to husband and wife.
8
Q
Trusts
A
- Beneficiaries.
- Inter Vivos Trusts are established during the lifetime of the trustor.
- Testamentary Trusts are set up by will and effective upon the death of the trustor
9
Q
OWNERSHIP BY BUSINESS ENTITIES
A
10
Q
Sole Proprietorships
A
- Unlimited liability
11
Q
Corporation
A
- Perpetual existance.
- Charter
- Double taxation
12
Q
S-Corp
A
- Functions like a C-Corp.
- Taxed like a partnership.
- Shareholders can deduct corporate losses on individual returns.
13
Q
Limited Liability Corporation
A
- Each member is an agent for the company.
- Any member can encumber the LLC.
14
Q
Partnership
A
- General Partnership: all members participate.
- Limited Partnership: limited partners are passive.
- LPs cannot bind partnership.
- Loss limited to investment.
- Uniform Partnership Act: If title is taken in the partnerships name (rather than in name of partners), it is called a Tenancy in Partnership.
- Upon the death of a partner, his interests will go to the surviving members or the partnership dissolves.
- Heirs have no rights or interests in the property.
15
Q
Syndicates
A
- Not a true legal ownershhip.
- May take the form of a joint tenancy, general or limited partnership, joint venture or corporation.
- Tenants in Common ownership is most common where investors by shares of real estate directly rather than shares of stock.
- Treated as securities.