Forms of Real Estate Ownership

Question 1

Ownership in Severalty

Answer 1

when property is owned by one individual, corporation or other entity

Question 2

Co-Ownership

Answer 2

when title to a parcel of real estate is held by two or more individuals

Question 3

Tenancy in Common

Answer 3

each tenant holds undivided interest in the property and have unity of possession; they are entitled to use of the full property even though they hold fractional ownership

Question 4

Joint Tenancy

Answer 4

property owned by two people whether married or unmarried

Question 5

Right of Survivorship

Answer 5

upon death of a joint tenant the deceased’s interest transfers directly to the surviving joint tenant or tenants

Question 6

Creating a Joint Tenancy

Answer 6

must be by the intentional act of conveying a deed or giving the property by will or living trust

Question 7

Elements to Create a Joint Tenancy (PITT)

Answer 7

possession, interest, time and title

Question 8

Terminating a Joint Tenancy

Answer 8

when one of the four elements is terminated

Question 9

Partition

Answer 9

a legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to its termination

Question 10

Tenancy by the Entirety

Answer 10

special form of co-ownership used in some states that allows a spouse to inherit the other spouse’s ownership

Question 11

Community Property

Answer 11

laws based on the idea that spouses are equal partners and property acquired during marriage is obtained by mutual effort

Question 12

Separate Property

Answer 12

property that was owned solely by either spouse before the marriage, purchased with separate funds during marriage or acquired by gift or inheritance to one spouse

Question 13

Trust

Answer 13

a device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party

Question 14

Trustor

Answer 14

the person who creates the trust

Question 15

Beneficiary

Answer 15

the person who benefits from the trust

Question 16

Trustee

Answer 16

the party who holds legal title to the property and is entrusted with carrying out the trustor’s instructions regarding the purpose of the trust

Question 17

Fiduciary

Answer 17

a person who acts in confidence or trust and has a special legal relationship with the beneficiary

Question 18

Living Trust

Answer 18

created by agreement during the property owner’s lifetime

Question 19

Testamentary Trust

Answer 19

established by will after the owner’s death

Question 20

Land Trusts

Answer 20

trusts where real estate is the only asset; public records usually do not name the beneficiary and generally it continues for a definite term

Question 21

Partnership

Answer 21

an association of two or more person who carry on a business for profit as co-owners

Question 22

General Partnership

Answer 22

all the partners participate in the operation and management of the business and share full liability for business losses and obligations

Question 23

Limited Partnership

Answer 23

one or more general partners, as well as limited partners. general partners fun the business and limited partners are not legally permitted to participate and therefore can only be held liable for business losses for the amount they invested

Question 24

Uniform Partnership Act

Answer 24

provides for the continuation of the existing business if a partner dies, withdraws or goes bankrupt

Question 25

Cooperation

Answer 25

a legal entity created under the authority of the laws of the state from which it receives its charter; managed and operated by a board of directors selected by shareholders - can own real estate in severalty or as a tenant in common

Question 26

Limited Liability Company

Answer 26

business organization with limited liability like a corporation and tax benefits like a partnership

Question 27

Condominium Ownership

Answer 27

horizontal property acts; owner of each unit holds a fee simple title to the unit as well as a specified share of the undivided interest in the remainder of the building

Question 28

Common Elements

Answer 28

land, courtyard, lobbies etc that condominium owners have an undivided interest in as tenants in common

Question 29

Right of First Refusal

Answer 29

in condominium ownership; owner is required to offer the unit to the same price to the other owners in a condominium or the association before accepting an outside offer

Question 30

Cooperative Ownership

Answer 30

corporation holds title to the land and the building then offers shares of stock to prospective tenants; purchaser becomes a shareholder in the corporation by virtue of that stock ownership - stock is personal property so they do not own real estate only interest in the corporation

Question 31

Time-Share

Answer 31

real property interest in a specified unit for a particular period of the year