Forms of Ownership Flashcards
condominium
Ownership of individual airspace plus an undivided ownership interest in surrounding common elements owned jointly by other ___________ owners.
co-ownership
__________ having an undivided interest in the whole property and equal rights of possession. Forms of ownership are tenancy in common, joint tenancy, and tenancy by the entirety. Once made, a tenancy can later be changed if certain legal formalities are met.
corporation
A separate, legal entity created and regulated by state law that has perpetual existence and the right to sell shares of ownership to the public. One disadvantage of __________ is the double taxation of income. The limited liability company (LLC) has become a more popular for of real property ownership because of its single tax feature and limited liability provisions.
inchoate dower
_______ is the legal right to real estate that a wife acquires during her marriage. _______ doesn’t manifest itself as a right until her husband dies; therefore, it is considered inchoate, meaning a right not yet perfected. The husband’s interest in his wife’s real property is called curtesy.
joint tenancy
Two or more natural persons with the right of survivorship. They can sell, encumber, or lease but cannot leave by will–a sale by one tenant will convert the ______ tenancy into a tenancy in common. Upon death a ______ tenant, the interest vests in the surviving tenants, without probate. Four unities are required to create a _______ tenancy with the right of survivorship form of ownership. These unities are possession, interest, time, and title (PITT). A corporation cannot be a joint tenant because it has perpetual existence.
partition
The dividing of common interests in real property owned jointly by two or more persons.
partnerships
An association of two or more persons who carry on a business and share in profits and loss. In a general partnership, each partner is liable for all the firm’s debts. Real estate may be taken in the name of the individual partners or the partnership. Death of a partner usually dissolves the partnership. In a limited partnership, the limited partners are not liable for the firm’s debts-however, the management and operation of the business is under the exclusive control of the general partners. A partnership files but does not pay income tax–each partner pays his or her own tax.
real estate investment trust (REIT)
Ownership of real estate by a group of individual investors who purchase certificates of ownership in the trust. The trust invests in real property and distributes the profits back to the investors free of corporate income tax.
sole ownership or tenancy in severalty
When one person or entity owns property, it is called tenancy in severalty–it could be either a legal entity, such as a corporation or association, or an individual person.
survivorship
The right of __________ is that special feature of a joint tenancy whereby all title, right, and interest of a decedent joint tenant in a certain property passes to the surviving joint tenants by operation of law, free from claims of heirs and creditors of the decedent.
tenancy by entirety
similar to a joint tenancy with right of survivorship, but tenants must be husband and wife. In essence, the marriage owns the property–thus one spouse cannot sell or partition the property, nor can a creditor of one spouse for a sale. Upon divorce, the parties become tenants in common.
tenancy in common
Two or more persons without the right of survivorship. Each has an undivided interest in the whole property; it does have to be equal shares. Any cotenant can sell without the other’s cotenant’s consent. They can leave by will–subject to probate; it does not pass to surviving cotenats. No one cotenant can claim possession of any specific physical portion of the property.
time-share
A form of ownership that creates a shared use of property for either a fixed or variable rate of time.
