Forms Of Real Estate Ownership Flashcards
Ownership In SEVERALTY
When a property is owned by one individual or corporation. Ownership is cut-off, severed from other owners. SEVERALTY OWNERS have sole rights to ownership, sole discretion to sell, will, lease or transfer any part of their ownership rights to a another person.
3 ways ownership in a Fee Simple Estate may be held
1) IN SEVERALTY
2) IN CONCURRENT OR CO-OWNERSHIP
3) IN TRUST
Concurrent or Co-Ownership
When title to a parcel of real estate is held by two or more individuals.
Four Forms of Co-Ownership:
1) TENANCY IN COMMON
2) JOINT TENANCY
3) TENANCY BY THE ENTIRETIES
4) COMMUNITY PROPERTY
Tenancy In Common
Real Estate owned by two or more people (TENANTS) each holding an undivided fractional interest in the ownership of the property (not the physical property). Each co-owner is entitled to possession of the property (UNITY OF POSSESSION). Ownership fractions are assumed equal unless stated otherwise on the DEED. Each co-owner’s interest is held in SEVERALTY and can be sold, transferred, conveyed, mortgaged without the consent of the other co-owners. When a co-owner dies, her/his undivided interest passes according to her/his will, living trust or heirs. In PA, TENANCY IN COMMON is assumed if the deed to property co-owned by unmarried people does not stipulate tenancy type.
Joint Tenancy
Property held by two or more people with RIGHT OF SURVIVORSHIP. The tenancy is owned in unity. Upon death of a JOINT TENANT, the deceased’ interest transfers directly to the surviving tenant(s). The last surviving tenant takes TITLE IN SEVERALTY and has all rights with sole ownership.
JOINT TENANCY can only be created by an intentional conveyance by deed or will or living trust. The deed must specifically identify and state intention of the parties to create a joint tenancy.
Four unities required to create Joint Tenancy
1) UNITY OF POSSESSION
(all parties hold an undivided right to possess the property)
2) UNITY OF INTERESTS
(all parties hold equal ownership interests)
3) UNITY OF TIME
(all tenants acquire their interests at the same time)
4) UNITY OF TITLE
(all tenants squire their interest by the same document)
The tests for these 4 Unities are:
1) Title acquired by 1 document/deed
2) Deed executed & delivered at 1 time
3) Deed conveys equal interests to all
4) Parties hold undivided possession of the property as joint tenants
How are Joint Tenancies terminated?
When any of the four unities of Joint Tenancy is terminated. A common example is conveyance of an owner’s undivided interest to another party the act of which terminates unities of time and title. The remaining original parties will still own the property as JOINT TENANTS, but the new owner will own her/his interest in SEVERALTY as TENANTS IN COMMON with the original parties.
Partition Suit
Partition is the legal way to terminate co-ownership when parties do not voluntarily agree to its termination. A court will order the property sold and proceeds distributed amongst the owners according to their fractional interests if the property cannot be physically divided without destroying its value.
Tenancy By The Entirety
A form of property co-ownership with RIGHTS OF SURVIVORSHIP that allows a husband or wife (or legal partner) to inherit the other spouse’s ownership interest upon death. Each spouse has an equal, undivided interest in the property. Because married partners are viewed as a one legal person (AN ENTIRETY), tenants generally have NO RIGHT TO PARTITION OR DIVIDE.
How are Tenancies By The Entirety terminated?
1) JUDGMENT SALE
2) DEATH
3) AGREEMENT
4) DIVORCE
Community Property
Based on the idea that a married couple enter into marriage as equal partners, not as one entity. COMMUNITY PROPERTY RIGHTS recognize two types of property:
1) SEPARATE PROPERTY
2) COMMUNITY PROPERTY
Separate Property
Property owned solely by either spouse or acquired by gift or inheritance or with separate funds after marriage.
Community Property
Real and personal property acquired by either spouse during marriage.
Trust
A device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third person.
Types of trust include:
1) LIVING
2) TESTAMENTARY
3) LAND
Trustor vs. Trustee vs. Beneficiary
TRUSTOR: grants or creates the trust
TRUSTEE: manages the trust
BENEFICIARY: one who benefits from the trust
