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Principles of Real Estate > Part 2: Real Estate Ownership > Flashcards

Part 2: Real Estate Ownership Flashcards

1
Q

System in the US that allows anyone to purchase and own land

A

Allodial System

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2
Q

Type and degree of interest (ownership) in real estate

A

Estate

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3
Q

2 categories of estates

A

1) Leasehold Estates

2) Freehold Estates

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4
Q

A person’s hold on a property is limited by a lease

A

Leasehold Estate

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5
Q

Free from a hold by anyone other than the owner and lasts for an unknown period of time

A

Freehold Estate

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6
Q

Complete ownership; the highest form of ownership recognized by law (common home ownership)

A

Fee Simple Absolute

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7
Q

Ownership is subject to a condition and can be taken away if the condition is not met; condition stays with the land even if the property is sold

A

Fee Simple Defeasible Estate, or “Qualified Fee”

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8
Q

When the property ownership is directly reversed due to a condition not being met

A

Reversion

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9
Q

Naming a 3rd party to have a remainder interest in a property in case of reversion

A

Remainder

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10
Q

2 types of conditions

A

1) Condition Subsequent

2) Condition Precedent

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11
Q

Condition- We never have so you never will

A

Condition Subsequent, or “Fee Simple Conditional”

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12
Q

Condition- We always have so you always will

A

Condition Precedent, or “Fee Simple Determinable”

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13
Q

A freehold estate based on someone’s life; Not inheritable

A

Life Estate

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14
Q

A life estate created voluntarily by a grantor (the property owner)

A

Conventional Life Estate

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15
Q

Type of conventional life estate where the measuring life is the life of the life tenant

A

Ordinary Life Estate

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16
Q

Type of conventional life estate where the measuring life is the life of someone other than the life tenant

A

Pur Autre Vie Life Estate

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17
Q

Statutory life estate created automatically by law, not by someone’s choice

Established to protect people from becoming homeless due to certain legal circumstances impacting their property

A

Legal Life Estate

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18
Q

Legal life estate for the husband in his deceased wife’s property

A

Curtesy

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19
Q

Legal life estate for the wife in her deceased husband’s property

A

Dower

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20
Q

Legal life estate that protects a family from certain debts, allowing them to continue living in the home

A

Homestead

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21
Q

Water rights that pertain to land bordering streams or rivers

A

Riparian Rights

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22
Q

Water rights that pertain to land bordering lakes or oceans

A

Littoral Rights

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23
Q

Rights that protect people’s rights related to the use of water by other people

A

Prior Appropriation Rights

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24
Q

The process of gradual addition of land

A

Accretion

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25
Q

The actual new deposits of land

A

Alluvion

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26
Q

The gradual loss of land

A

Erosion

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27
Q

The sudden removal of land

A

Avulsion

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28
Q

The gradual subsiding of water, leaving additional land

A

Reliction

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29
Q

Type of estate created by a lease agreement; limited duration

A

Leasehold Estate

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30
Q

The owner of the property who leases it

A

Lessor

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31
Q

The renter

A

Lessee

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32
Q

Leasehold estate for a stated period

A

Estate for years

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33
Q

Leasehold estate without a specified time frame or number of months; “period-to-period estate”

A

Periodic Estate

34
Q

Tenancy until an unknown time in the future

A

Tenancy at will

35
Q

Holdover tenancy; tenant wrongfully remains on the premises after their right to possess it has ended

A

Tenancy (Estate) at Sufferance

36
Q

Common type of residential lease where the tenant pays a set amount & the landlord pays building operating expenses

A

Gross Lease

37
Q

Type of lease where the tenant pays a set amount plus some or all of the building’s operating expenses

A

Net Lease

38
Q

Type of lease where the tenant pays a fixed monthly amount plus a percentage above a base amount

A

Percentage lease

39
Q

Type of lease that allows for future changes in the amount of rent related to a business

A

Variable lease

40
Q

2 types of variable leases

A

1) Graduated lease

2) Index lease

41
Q

Type of variable lease that indicates increasing predetermined amounts of lease

A

Graduated lease

42
Q

Type of variable lease that doesn’t state a specific amount of increase because the increase will be based on a common index

A

Index lease

43
Q

Type of lease for undeveloped land long term in which a corporate headquarters is then built and operated by the tenant; after the lease is up, the land and building go to the land owner

A

Ground lease

44
Q

One-time lease payment to allow for drilling, then a royalty for any gas or oil found. If none, flat rent is charged.

A

Oil and Gas lease

45
Q

Leasing with the intent to purchase at a later date

A

Lease-Purchase

46
Q

Investor buys a building from a company and then leases it back to them

A

Sale-Leaseback

47
Q

A renewal option for a lease

A

Lease option

48
Q

Option that allows the tenant to purchase the property during a specified period

A

Lease with option to buy

49
Q

Legislation that protects both the landlord and the tenant

A

Uniform Residential Landlord and Tenant Act

50
Q

Sole ownership

A

Ownership in severalty

51
Q

Ownership of 2 or more people with the right of survivorship

A

Joint Tenancy

52
Q

If a co-owner dies, his shares automatically go to the surviving co-owners

A

Right of Survivorship

53
Q

4 Unities of Tenancy

A

1) Unity of Time (acquire ownership at the same time)
2) Unity of Title (ownership is created by the same deed)
3) Unity of Interest (own equal percentages)
4) Unity of Possession (equal rights to access and possess the property)

54
Q

When a co-owner sells their share of the property, the new owner is called…

A

Tenant in Common

55
Q

Right of a tenant in common or joint tenants to legally force the end of the tenancy

A

Right to partition

56
Q

Form of joint tenancy that exists between husband and wife & includes Unity of Person

A

Tenancy by the Entirety

57
Q

Property acquired during a marriage; each spouse owns 1/2

A

Common property

58
Q

Business partners have a right to manage the partnership equally but they have unlimited liability for debts

A

General partnership

59
Q

At least 1 general partner and 1 or more limited partners that are only liable to the extent of their investments and don’t run the business

A

Limited partnerships

60
Q

Artificial person created by a charter that is run by a board of directors, have shareholders that invest and are paid dividends, can hold title to real estate, and pays income taxes

A

Corporation

61
Q

Combines general corporation and a partnership, so shareholders have limited liability and avoid double taxation

A

S Corporation

62
Q

Best form of business ownership for small businesses

A

Limited Liability Company (LLC)

63
Q

2 or more people who operate a real estate investment, usually a limited partnership

A

Syndication

64
Q

3 parties to a trust

A

1) Trustor
2) Trustee
3) Beneficiary

65
Q

Party to a trust that transfers property into a trust

A

Trustor

66
Q

Party to a trust that manages the trust and holds legal title to the assets in the trust

A

Trustee

67
Q

Party to a trust that benefits from the trust

A

Beneficiary

68
Q

Type of trust that is created by a property owner during their life and automatically goes to the beneficiary when the owner dies

A

Living trust

69
Q

Type of trust that is set up after the property owner’s death in accordance to their will

A

Testamentary trust

70
Q

Type of trust that holds only real property (real estate & rights of ownership)

A

Land trust

71
Q

Document that transfers real property in a land trust

A

Deed in trust

72
Q

Document that transfers real property out of a land trust

A

Trustee’s deed

73
Q

Type of business organization for small investors who pool their money and participate in large real estate projects

A

Real Estate Investment Trust (REIT)

74
Q

Tenants form a nonprofit corporation that purchases a building and holds title; tenants own shares of stock giving them long-term proprietary lease to occupy the building

A

Cooperative

75
Q

Multi-unit building in which all occupants own separate property as tenants in common of the common elements and pay maintenance fees for the common elements

A

Condominium

76
Q

Master document of the HOA that establishes the condominium, the covenants and restrictions, board of directors power & procedures, all fees, and legal description & recorded plat of each unit

A

Declaration

77
Q

States all rights, responsibilities, governance procedures and fees for a condominium

A

Condominium bylaws

78
Q

Type of ownership in which someone owns or leases a specified time in a property, usually a week

A

Time-Share

79
Q

Fee simple interest in a unit is purchased for the same period each year in perpertuity

A

Time-Share Estate

80
Q

Contracted right to use a property for the same period each year for a certain number of years

A

Time-Share Use

Principles of Real Estate (3 decks)

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