Forms Of Real Estate Ownership - Unit 4 Flashcards
Legal terminology ending in “or” is the ?
Giver
Legal terminology ending in “ee” is the?
Receiver
What are 3 forms of real estate ownership?
Severalty
Co-ownership
Trust
What is severalty?
Title is held by one person
What is co-ownership?
Title is held by 2 or more individuals
What is a trust?
A third individual holds title for another
What is tenancy in common?
A form of co-ownership where possession of land or property is the only thing in common
Unequal ownership. They share possession.
Default form of ownership by 2+ people of not drawn up by a lawyer.
You CAN will turn % away.
What is joint tenancy?
A form of co-ownership that include possession, interest, time, and title. (PITT)Must have ALL.
P-owning
I-has to the same % split ownership. Equal.
T-all sign the deed the same day
T-share the same type of deed
Has RIGHT OF SURVIVORSHIP. if one owner dies, interest passes to surviving tenants. Last one standing becomes owner in severalty.
What are ways to terminate joint tenancy?
Any PITT changes.
Partition
Joint tenant conveys (sells) interest to someone else
What is a partition?
Legal way to dissolve joint tenancy when partied don’t agree to terminate. Judge decides this. If the property cannot be divided physically it will be sold and divided financially.
Think of desk walls at work.
What is tenancy by the entirety?
A special form of co-ownership for MARRIED couples.
In the event of divorce it becomes tenancy in common. Right if survivorship doesn’t exist so they can sell their interest.
What are ways to terminate tenancy by the entirety?
Judgement sale
Death
Agreement
Divorce
While the marriage is good, tenancy in entirety resembles joint tenancy. When it goes bad and they get divorce it becomes tenancy in common.
In the event of death, the remaining person owns the property in severalty and doesn’t have to go through probate to get the title.
What is community property?
Based on the idea that husband and wife, rather than merging into one entity, are equals partners in the marriage. It’s owned and acquired by the marriage
Who is involved in a TRUST?
Trustor - giver
Trustee - holder
Beneficiary - receiver
What is a living trust?
Set up to provide an income to a beneficiary during the life of the trustor
What is a testamentary trust?
Set up to provide an income to a beneficiary in the will of the trustor.
What is a land trust?
Real estate is the only asset.
A distinguishing fact of a land trust is that the BENEFICIARY doesn’t have to be named in the courthouse.
Beneficiary is usually the trustOR because it’s anonymous that you own that property.
What is general ownership?
Business ownership where all the partners participate in the operation and management and share full liability and obligations. We win, or lose, together.
What is limited ownership?
A business ownership that consists of one or more general partners as well as limited partners. Limited partners are not allowed to participate and are only held liable for their investment financially
What is a corporation?
An artificial person that can buy real estate. Manager and operated by board of directors who select officers to handle daily tasks.
The death of an officer or director affects nothing as far as title to the property.
What is an LLC?
Limited liability corporation. It combines the most attractive features of limited partnership and corporations. Has tax advantages of partnership.
What are condominiums?
Have common elements. Governed by Horizontal Property Acts and fee simple ownership of the air rights
Common elements is key
What are common elements?
A specified share of the undivided interest in the remainder of the building and land. You share stuff (pool, water fountain, workout facility)
What are operation and administration of condominiums?
Costs of maintaining and operating the building are paid of the owners in the form of fees and assessments.
It’s important to understand association fees and rules when buying these
In a condominium, if you default on taxes or a mortgage loan who does it affect?
Only the owner of the unit is affected if defaulting in taxes or mortgage.
What is a cooperative?
personal property owned by a business tha has tenants through proprietary leases and shareholder ownership
What is a proprietary lease?
When you purchase stock in the company that holds title to the land or building and you receive a proprietary lease to the apartment for the life of the company.
You cannot hold title.
You are renting because you bought shares.
Operations and administration is decided by the cooperatives bylaws.
What happens when someone defaults on payment in a cooperative?
The default payments fall on the remaining shareholders.
What are townhouses?
Common walls, fee simple ownership in the land and air space. You get a deed to the land.
*can have common elements as well
What are timeshares—use and estate?
Aka membership camping
Small % of real estate
Timeshare use- stay for designated time period for each year for a set number of years at which time the owners rights terminate.
Timeshare estate—actually owning the land and deed. Make money from timeshare use. Absolute fee simple ownership.
What is a joint venture?
An entity formed by 2 or more parties to undertake an economic activity together. Real estate and something else.
What is separate property?
Property attained or gifted before marriage.
What is a syndicate?
When 2 or more people invest in real estate
Condo owners have the same tax benefits as…?
Single family homes
Common elements in a condo does NOT include?
Parking stalls assigned to particular apts
The bylaws governing a property that is subject to the condo law general would not include what?
The percentage of common interests for each apt
Who do you consults about title?
An attorney
The real property interest that takes form of personal property is?
Cooperative unit ownership
