Forms of Real Estate Ownership Flashcards
What is a Condominium?
Single units are usually in low and highrise complexes, such as townhouses or stand-alone units.
Describe the Ownership of Condo?
Owners have Fee simple title of the interior of their units and share ownership in common areas
Describe the Transfer of Condo?
Owners may transfer their titles by living trust, deed, or will. Some HOA have Right of Refusal, which first allows other condo unit owners or association to accept the offer for a unit before outside sources
How are Condos governed?
Declaration of condominium and board of directors elected by homeowners.
What is a Cooperative?
Single units usually in low or highrise complexes.
Describe the ownership of Co-ops?
Tenants own shares in a corporation, partnership, or trust that holds title to the building. Tenants have propriety leases that allow rights to occupancy.
Describe the Transfer of Co-ops?
Shares are personal property and may be sold or transferred. Bylaws may restrict transfer of shares.
Describe the governance of Co-ops?
Bylaws of corporation and board of directs elected by shareholders.
What is Time-Share?
Multiple purchases buy interest in real estate. Usually a resort or hotel property
Describe the ownership of Time-share?
Time-share owners hold fee interest and have the right to use the unit for a set time each year or for a certain number usage points. Time-share interest agreement is personal property that expires after a specified time period.
Describe the Transfer of Time-share?
Interest are personal property and may or may not be transferable according to contract. Transfer of Interest is by Deed or Will by owner.
Describe the governance of Time-Share?
Governance is by Developer.
What type of title does a Condo unit owner hold?
Fee simple title, with condo laws, or horizontal property acts that state the fee simple title.
What is townhouse?
A townhouse is a 2 story residential that share common wall or walls with other units.
Can a townhouse also considered a condo?
Yes. Townhouses can also be considered condos.
Condo owners benefit from real estate tax incentives because of the real estate taxes paid throughout the year. T/F?
False. Condo unit owners pay real estate taxes, but do not get to enjoy end of the year tax incentives. Only the association associated with the condo/developer benefits from this. Condo unit owners pay for these fees through Condo fees that are paid monthly, semiannually, or yearly dependent on the condo bylaws.
What does the HOA of a condominium consist of and how are the board of directors elected?
HOA consist of unit owners and elect the board of directors.
Who manages the condominium?
The HOA or a hired Property Manager
What are the responsibilities of HOA of a Condo?
Maintenance and repair, cleaning and sanitizing of common areas and structures, fire protection and liability insurance, extended coverage, operation of building and enforcing rules.
What do Assessment Payments of condo fees cover?
Special payments for specific developments like a new roof.
Can a condo be mortgaged?
Yes.
If a condo unit owner is unable to pay for a unit, the association has right to impose forced sale or lien through legal action. T/F?
True, this does not affect other unit owners
Unlike a condominium association, which has the authority to impose a lien, the burden of any defaulted payment in a cooperative falls on the remaining shareholders. T/F?
True. The financial burdens and ability of a shareholder burdens all other shareholders.
Why is the financial situation of a prospective shareholder of a co-op important?
Because any financial burdens of one affect all other shareholders
Condominium
Time-share
Cooperative
- ) Owner of each unit holds fee simple title to unit
- ) Proprietary leases give the right to occupy the units
- )Ownership includes a percentage of the building’s common elements
- ) Occupants may have either a real property estate or an occupancy use interest
- ) Corporation holds title and offers stock shares
- ) Use limited to a contractual period
Condominium 1, 3
Time-share 4, 6
Cooperative 2, 5
The individual unit owners of a condominium own the common elements as tenants in common. T/F?
True.
Condominium laws are often called vertical property acts. T/F?
False. Horizontal Property Acts
