Interests In Real Estate Flashcards
Interests
estates or tenancies. the extent of someone’s claim to real estate.
Freehold Interest
ownership
Non-freehold Interest
possessory rights that don’t include ownership (rental)
Fee Simple Absolute (fee, fee simple, fee simple indefeasible)
default type of ownership. inheritable and not restricted to any bundle of rights.
only limited by public and private restrictions (zoning, building codes)
Fee Simple Defeasible
limited ownership in real estate and can be lost if limit is violated or condition is triggered
Fee Simple Determinable
Fee Simple Defeasible - automatically lost when limit is violated
Fee Simple Subject to a Condition Subsequent
Fee Simple Defeasible - lost when legal action brought pursuant to violation of limit and return property to original grantor
Fee Simple Subject to an Executory Limitation
Fee Simple Defeasible - similar to condition subsequent but expect property would be transferred to third party named by grantor
Life Estates
exist as long as owner/life tenant of property is alive
habdem clause
section in life tenant’s deed that states who the ownership transfers to (usually remainder man) when life tenant passes
Remainderman
a person who inherits or is entitled to inherit property upon the termination of the estate of the former owner
Life Estate in Reversion
life tenant dies, legal title transfers back to original grantor
Life Estate in Remainder
life tenant dies, legal title transfers to some third party named by original grantor
Pur Autrie Vie
not based on life tenant’s term of life but on some arbitrary third party’s life as named by original grantor
Legal Life Estates
life estate created by law.
Dower’s Rights
surviving husband or wife is granted life estate for real property that was not willed to them, but owned by spouse at spouse’s time of death. This is inactive until death.
some states it’s up to 1/3 of deceased spouses real estate
Inchoate
inactive
Homestead
life estate granted to owners of family home. protection from forced sale of home to satisfy debts up to a certain amount. can only do one at a time.
Present Interest
life estate tenant owns this until death
Future Interest
Remainderman or grantor in reversion interest hold this
Life Tenant
who owns ownership rights in the present moment. they cannot commit waste because it would compromise the future interest. can use entire bundle of rights minus devise.
they can rent/sell but when the owner passes, the rights go to the future interest which isn’t ideal
Severalty
ownership held by one person.
Co-Ownership
ownership shared by two or more persons
Tenancy in Common
co-ownership default. purchase without specifying interests in dividing. could be equal or unequal. cannot be compromised and is inheritable
Joint Tenancy
- co-ownership must be chosen by all persons and noted in deed.
- follows survivorship
- not inheritable
- if part of it is sold, it is removed from joint
- can be completely terminated by voluntary action, court order, or death of all tenants.
- if 3/4 die, it becomes severalty
Unity of Possession
4 unities - all have equal rights of possession
Unity of Interest
4 unities - all have equal interests in property
Unity of Time
4 unities - all purchase property at same time
Survivorship
if one co-owner dies, their interest is divided amongst the remaining parties evenly
Unity of Title
4 unities - all acquire in the same deed
Tenancy in Entirety
joint tenancy for married couples. includes creditor protections. limitation on forced sale to satisfy debts of only one spouse
if divorce, turns back to tenancy in common
Separate Property States
Entirety - my sell or devise separately, similar to joint tenants
Community Property States
Entirety - property acquired during marriage cannot be sold or devised without consent of both spouses even if only one bought it
Condominiums
subdivided building into units, tenants in common.
Master Deed
how the condo building and its home owners association will be set up
Declaration of Trusts
sets up Board of Trustees to manage condo association
Bylaws
rules of the building
Condo Conversion
a building that turns into condos
Condo Fees
monthly fees to maintain common areas and upkeep. If failed to pay, may risk foreclosure
Super-Priority Lien
Lien implemented by the association is dues are not paid. For up to 6 months of unpaid fees to unit.
run with land, responsibility is on unit not unit owner. binding on prop owner
Special Assessments
(watch out for) extra condo fees charged to repair or upgrade building
Capital Reserve
(watch out for) money held in a reserve fund account by condo associations and investors to pay for improvements to property
Cooperatives
Cooperative formed for limited purpose in apartment buildings. LLC provides housing to shareholders.
people who live their own stock or shares on company, gives right to proprietary lease to their unit.
Own company not unit
Co-Op Board
board of trustees. owners pay coop fees. Bank will accept stock as collateral for loan
Why are Co-Ops Created..
to permit their residents to limit unit ownership in a legally permissible way since co-op approves sale of shares.
Allows for housing for specific types of people. must be legal and comply with FHAs
Trusts
Created during persons life or upon death. Trustor grants access to trustee who cares for trust’s assets on behalf of beneficiaries
Trustor
Creates trust
Beneficiaries
Who receives money from trust
Land Trusts
trusts that only own real estate and don’t include other assets
typically last for some limited period of time (ex; 25 years)
Timeshares (interval ownership, prepaid vacations, floating use period)
dividing time rather than space. owns a specific part of the year along with shared interest in common areas. Owner pays maintenance fees for upkeep year round
Securities
investments (stocks or bonds)
Syndications
Securities -
