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Real Estate > Interest in Real Estate > Flashcards

Interest in Real Estate Flashcards

1
Q

Freeholds

A

Refers to Ownership (maximum rights to)

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2
Q

Interest in Real Estate

A
  • Refers to the extent of someone’s claim to real estate

- having an interest in real estate doesn’t mean you own it, just means you have the right to the property

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3
Q

Fee Simple Absolute

A

-Default ownership
-Not in any way limited; and is inheritable
- owner is entitled to the whole rights to property
Limitations are only in public vs private restrictions (e.g. zoning, building codes)

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4
Q

Fee Simple Defeasible

A
  • Grant of title dependent on a specific condition
  • Ownerships is an interest that is limited in some way
  • Can be lost if the limitation is violated
  • Holder of reversionary interest would have the right and acquire title if a condition is
    broken
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5
Q

What are the three types of defeasible interests?

A
  1. Fee simple determinable
  2. Fee Simple Subject to a Condition Subsequent
  3. Fee Simple Subject to an Executory Limitation
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6
Q

Fee Simple Determinable

A

Automatically lost when a limitation is violated

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7
Q

Fee Simple Subject to a Condition Subsequent

A

Lost when legal action is brought due to the violation

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8
Q

Fee Simple Subject to Executory Limitation

A

Same as fee simple, where property is lost due to a violation of limitation, subject to a condition subsequent except the property would be transferred to the third party named by the grantor, rather than back to the original grantor themselves

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9
Q

Life Estate

A
  • A freehold interest
  • Only exists if the owner is alive
  • life tenant’s deed will state who receives the life estate upon death

-Remainder of interest gets transfers as a fee simple absolute estate at death

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10
Q

Life Estate Reversion

A

When the life tenant dies, the legal title will transfer back to the original granter

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11
Q

Life Estate Remainderman

A

A life tenant dies -> legal title will transfer to some third party named by the grantor

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12
Q

Pur Autre Vie

A

When the estate ownership is based on a third parties term of life, named by the grantor

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13
Q

Legal life Estate

A

Often in cases with dowers rights (where surviving husband or wife is granted a life estate for real property that was not will to them but that was owed by their spouse tine o death. typically 1/3rd of interest.

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14
Q

Co-Ownership

A 
Any freehold interest (ownership) shared by two or more persons, including corporations
Types:
1. Tenancy in Common
2. Joint Tenancy
3. Tenancy  by Entirety
4. Condominiums
5. Cooperatives
6. Trusts
7. Timeshares
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15
Q

Tenancy in Common

A
  • default form of co-ownership
  • co-owners who purchase property without specifying a type of ownership own in common
  • Inheritable
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16
Q

Joint Tenancy

A

Co-ownership must be chosen by all co-owners and specified in the deed

  • Not inheritable
  • Survivorship is created
  • Equal right of possession, purchase the property at the same time
  • Can be terminated by agreement (voluntary partition), court action, or death of all joint tenants
  • If one tenant survives then surviving owner owns in severalty
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17
Q

Tenancy by the Entirety

A

Joint tenancy for married couples.

includes creditor protections: a limitation on the forced sale of the property to satisfy the debts of one spouse only

  • If a couple divorces defaults back to tenancy in common
  • Community property states - during the marriage cannot be sold or devised w/out consent of both spouses
18
Q

Condominiums

A
  • Subdividing a building into separate unites
  • Creating fee simple ownership of the individual units
  • Each condo owner owns their unit via unit deed, share of the common areas in proportion to unit’s fair market value
  • Tenants in common
  • Master deed is created = describes how the building and condo homeowners will be set up
    -Declaration of trust set up
    -Bylaws of associates are rules of building
    Also known as a condo conversion
19
Q

What does a condo fee include

A

Owners responsibility for their proportionate share of common area expenses
-Owners who fail to pay fee risk of foreclosure

20
Q

What are the common problems with condo’s to watch out for?

A
  • Special assessments
  • a lack of capital reserves (money held in a reserve fund account by condo associations and investors to pay for property improvement)
  • Low owner occupancy rates
21
Q

Cooperatives

A 
A company (usually LLC) formed for the limited purpose of providing housing to its shareholders. 
-people in building own shares in the company (stock certificates)which then gives them a right to proprietry lease
22
Q

Trusts

A

Created during a person’s life or upon their death. Trustor (person creating trust) conveys property to a trustee who cares for the assest on behald of the beneficiaries (the people who recieve money from the trust

23
Q

Timeshares

A

A way of dividing time, rather than space, in the property. Timeshares or timesharing is a form of ownership where the owner only owns a specific part of the year in fee simple, along with a shared interest in the common areas.

24
Q

Securities

A

Investments (e.g stocks and bonds).

25
Q

What are the different types of securities:

A

Syndications
General Partners (management role) or Limited Partner (passive investors who do not have a management role)
REITs (Real Estate Investment Trusts
REMIC (Real Estate Mortgage Investment Conduits)
REMTs (Real Estate Mortgage Trusts)-

26
Q

Why are we concerned with these investments(securities)?

A

A person must have a securities license to market and sell interest in an investment vehicle

27
Q

Non-Freeholds

A

Interest confer the possession and uses of someone’s real property without transferring ownership
An example in a rental lessor is the landlord and the lessee is the tenant

28
Q

Syndications

A
  • legal entities that invest in a single piece or pieces of real estate
  • Either General Partners or limited partners (passive investors)
29
Q

REITS

A

Real Estate Investment Trusts

30
Q

REMIC

A

Real Estate Mortgage investment conduits

31
Q

REMT

A

Real Estate Mortgage Trusts

32
Q

REITS AND REMIC

A

Allow indirect investment in real estate or real estate loans and provide a return based on performance.

33
Q

Non-Freeholds

A

Confer the possession and use of someone’s real property without transferring ownership (example renter)

34
Q

Leaseholds

A

Witten conveyance of the possession real estate for a period of time

35
Q

Tenancy at Will

A

A verbal or written right to possess property wihtout any specifica term or stated interval

36
Q

Periodic Tenancy

A

right to possess the property with fixed intervals

37
Q

Lessor

A

the landlord

38
Q

Lessee

A

the tenant

39
Q

Non-Freehold Interest

A
40
Q

Severalty

A

A free hold interest (ownership) held by only one person. Its roots are severed; severed from any co-owners

41
Q

Master Deed

A

A document that creates a condominium and defines individual units and common areas

42
Q 
Which of the following is inheritable?
A. Tenancy in common
B. Tenancy by the entirety
C. Life Estate in reversion
D. life estate in remainder
A

A. Tenancy in common

Real Estate (20 decks)

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