Modern Real Estate Practice: Unit 3 Flashcards
Forms of ownership…
- Sole and separate ownership (estate in severalty)
- Concurrent (or multiple) ownership
- Common interest community ownership
Types of partnerships as a legal entity in owning in severalty…
- General partnership - all have equal say and liability
2. Limited partnership - liability is equal to their share of ownership (what they’ve financially contributed)
Concurrent (multiple) or co-ownership…
Two or more persons share ownership with undivided interest. Their shares or interests are fractional but undivided and they have equal rights of possession.
Buyers should obtain an attorney’s advice…
to determine the most appropriate form of co-ownership
Tenancy in common is co-ownership…
without the right of survivorship (default in most states) only options where shares can be unequal
No survivorship, interests go to their heirs…
upon death: 1. subject to probate 2. each tenant will be responsible for the property taxes 3. partition lawsuit can divide property among co-owners
Joint tenancy is co-ownership…
with the right of survivorship to the other owners, it must be specified in the deed as joint tenants, and ownership shares must be equal
Upon death interests in joint tenancy, co-ownership go…
to co-owners without going through probate (this overrides a will). Affidavit must be recorded (death certificate and join tenancy)
Joint tenancy must have four unities…
PITT Possession Interest Title Time
Common Interest Ownership Act
State regulations for condos, cooperatives, and other forms of common interest ownership
Common interest community has authority to levy…
mandatory assessments on its owners for maintenance of common elements (OA or HOA)
Sellers have disclosure requirements to buyers related to…
the sale of common interest property
Common elements
Tenants in common (tennis courts, pool, etc.)
Common interest community ownership may be…
any type of use of real estate (commercial, `residential)
Limited common element…
is reserved for the use of one or more unit(s) to the exclusion of other units (parking, storage, balconies)
Each unit owner is a…
member of the OA (nonprofit)
OA sets the rules…
for rentals
OA does not…
develop land
Common interest community ownership has…
separate title and taxation
OA may also have…
tax liabilities (taxed as one parcel)
Owners in common interest community…
own and finance their individual units independently
Town house is similar to condo but differs in that…
it generally includes ownership of the land under and around the unit
Cooperative…
owned by a corporation stockholders to occupy units. Tenants association owns the real estate.
Buyer of a cooperative unit…
Receives membership in the association, shares of stock and proprietary lease (no deed; no ownership of unit)
Time-share…
Purchasers buy interest in real estates and receives rights to use property for a certain amount of time (may own land)
Timeshare is most common for…
resort properties
Alienation…
act of conveying (transferring) real estate ownership (title)
Private grant is from..
individual to individual using a DEED
Public grant is from…
government to individuals using a LAND PATENT
Dedication is from…
individuals to the government
Seller of real property will always be required to provide a…
written deed
Deeds do not…
guarantee or prove ownership
Deeds do not have to be required for…
title to transfer; title passes upon acceptance of the grantee
Essential elements of a valid deed…
- Competent grantor (18, sane and sober)
- Execution by the grantor (signature)
- Identifiable grantee (competency not needed)
- Delivery to and acceptance by grantee (title passes upon acceptance by grantee)
- Legal description of the land
- Consideration (money or something of value)
- Words of conveyance (granting clause)
Legal description only describes…
the land - appurtenances are presumed to transfer with land unless excluded and not mentioned in legal descriptions
Types of conveyance deeds…
- General warranty deed
2.
General warranty deed…
includes the most promises or covenants, greatest protection for the grantee (buyer), and contains five covenants
Five covenants of general warranty deed…
- Seisin - grantor owns and has right to convey
- Quiet enjoyment - grantee will not be disturbed by others claiming an interest
- Against encumbrances (nothing undisclosed)
- Further assurance (future cooperation in signing docs)
- Warranty forever (defense of title against claims)
Special (limited warranty deed…
Two warranties: 1. grantor owns and can convey (seisin) 2. Will protect against defects or encumbrances arising during grantor’s ownership (no protection against previous claims)
Quitclaim deed…
Best for the grantor (seller) - no covenants or warranties (what I’ve got, you’ve got). Clears clouds on title. Used when grantor wants no future claims or liability
Other deeds…
- Bargain and sale deed - one promise - owners right to convey
- Trustee deed// sheriff’s deed - transfers title at the end of foreclosure
- Reconveyance deed - when borrower pays off a loans
Probate is the process of…
distributing all of a deceased person’s assets
Wills must go through…
probate in order for the devisee to receive receive real property (EE receive)
Testator is the person…
who has the will
Devise is the act of…
transferring real property to another deed
Bequest is the act of…
transferring personal property to another bill of sale
Advantage of a will is that…
all heirs are known and there is no chance of escheat (government taking ownership)
Intestate succession…
no will; heirs/descendants are determined by state laws. If no heirs, property will escheat to the state
Involuntary alienation…
the law presumes owners will regularly inspect their property and protect their interest by giving a notice to anyone trespassing (may lose rights of ownership)
Title obtained for adverse possession or an easement by prescription is…
not voluntarily granted by the property owner but is granted through courts
Owners who are aware of possession and use by another have given permission…
Do not fall under the law of involuntary alienation
Adverse possession (OCEAN)…
Ownership is recognized by courts after Open, Continuous, Exclusive, Actual, and Notorious POSSESSION of another’s land for a certain period set by state law
Prescriptive easement (OCEAN)…
Easement recognized by courts after Open, Continuous, Exclusive, Actual, and Notorious USE of another’s land for a certain period set by state law
Seller’s property disclosure covers…
- Land/soil and environmental conditions
- Structural issues and conditions of fixtures
- Lot size, encroachments, easements
- All material defects
Sellers (never the broker) complete the disclosure to the…
best of their current knowledge
Seller and broker must disclose…
visible and latent material defects (facts)
Material fact or defect is…
one that, if known, might change a decision
Latent defect is…
a hidden fact that is not easily discovered by an inspection
Most states require brokers to visually inspect the property and do the following…
- Disclose all material defects they find
- Request the seller to disclose latent defects
- Upon discovery, immediately disclose to all parties
- Recommend that buyers have inspection
Brokers responsibility for seller misrepresentation…
If a seller misrepresents a latent defect in the seller’s property disclosure, the seller not the broker would be held responsible
