Real Estate Interest and Ownership Chapter 2 Flashcards
Estate
1) The degree, quantity, nature and extent of ownership interest which a person has in real property.
2) It refers to one’s legal position of ownership-not to the amount of property owned.
3) To be an estate, an interest must be possessory or potentially become possessory, and whose ownership is measurable in terms of time duration.
Two systems of real estate ownership
1) Feudal
2) Allodial
The Allodial system features 2 types of estates.
1) Freehold
2) Less than Freehold
Freehold
Indefinite Duration
Less than Freehold
Definite duration- Lease
Types of Fee Estates- Under the category of Freehold.
1) Fee simple absolute
2) Defeasible Fee
3) Fee Tail
Inheritable
Fee simple absolute
Highest Form-Full bundle of rights. Own as long as want to.
Defeasible Fee
Can be defeated- conditions if they are not met will loose property.
Two types of Defeasible Fee
1) Fee determinable/simple absolute
2) Fee Conditional/simple defendable
Fee Determinable
Automatic- The estate could be granted as long as they do something …. Like never spend a day in jail. There is a stipulation
Fee conditional
Not automatic-a certain condition must be met to keep the building. If violated the ownership goes back to the grantor. If condition is not met, it is not automatically given back it must require the grantor to initiate a court action.
Fee Tail
Limits heirs to lineal descendants. (Blood relatives) Not legal in Arizona.
Life Estates
Freehold, Not inheritable, don’t know how long it will be. Worth less than fee estates.
Two categories of Life Estates
1) Conventional
2) Statutory
Ordinary (conventional) life estate
Limited in duration to the life of its owner or to the life of some other designated individual.
Freehold; own the property, but only for a limited time
Not inheritable- Upon the death of an individual the estate would revert to the grantor or other individual
Statutory Life Estate
called dower, curtesy, community property, and homestead.
Arizona recognizes community and homestead.
Dower
Not in AZ
The legal right in some states that a wife acquires in the property her husband holds or aquires anytime during their marriage.
Curtesy
The interest, recognized in some states, of a husbands in property owned by his wife at the time of her death.
Rights of Life Tenant
1) Sell
2) Lease
3) Encumber-A claim against or liability. Can include liens, deed restrictions, easements, encroachments and licenses.
4) Life Tenant cannot make waste/destroy
Characteristics of a life estate
Less than fee simple.
Based on the life of an other.
Only time life estate is inheritable.
Always accompanied by a second estate. (Reversion/Remainder)
Reversion
Is not considered inheritance (Backward move)
Remainder
Move with heir- forward move
A future interest in real estate created at the same time and by the same instrument as another estate, and limited to arise immediately upon the termination of the prior estate.
Homestead
To protect homestead equity to $150.000
How is homestead established
Value: Unpaid taxes Unpaid Assessments Unpaid Real Estate loans Unpaid Mechanics liens
How is a homestead terminated
Not primary residence, abandoned 2 years, sell
Special protection upon sale of a homestead
Put money into an account for 18 months.
How is homestead calculated
subtract Taxes Assessments RE loans Mechanics leins
EQUAL= Equity
Community property
1/2 interest ( Rights of survivorship)
Type of Statutory Life Estates.
1) Dower- Not in AZ
2) Curtesy-Not in AZ
3) Homestead
4) Community Property
Types of Leasehold estates
1) Estate for years
2) Estate from period to period
3) Estate at will
4) Estate at Sufferance
Estate for years
Written lease from specific time- time
Estate from period to period
Lease for any period with no time- Month-to- Month
Monthly- 1 months notice
Weekly- 10 Days notice
Estate at will
Lease for an indefinite period of time.
Estate at Sufferance
Hold over tenant or stop paying.
Someone has possession and is not paying.
License
Right to use property (revocable)
Billboard on land, hunting on some ones private property.
How is License different from easement?
Irrevocable right over the real estate over another. Right to use land but no right to it.
Define Easement
1) A right acquired by one party to use the land of another for a special purpose.
2) Since the easement is a right or interest in use, it is not an ownership interest in the land.
Types of easement
1) Easement appurtenant
2) Easement in Gross
Easement appurtenant
Easement runs with the land
2 separate properties required
2 owners required
Servient Property- One Burdened (Land locked)
Dominant Property- One property has use.
Easement in Gross
1 partial- granted to entity
This easement is a right or interest to a person-not property.
Holder of the easement not required to own property adjacent to the servient property.
Ordinarily cannot be sold to third party and ceases on death or liquidation of the easement hold
Created by agreement between 2 people.
Ex… Cell tower on land.
How are easements created
1) Agreement- 2 people
2) Condemnation- Immanent Domaine
3) Necessity (Implication)- requirement, landlock
4) Prescription-Class A-3- If shown adverse agreement-open, notorious, contemptuous and hostile
How are easements terminated?
1) Release- Agree to release
2) Merger- New party owns both
3) Failure of purpose- New road
4) Abandonment-Did something else with property.
Types of Tenancies
1) Sole and Separate
2) Co-ownership
Sole and Separate
In Severalty (One served from other interests)- One
Own completely by self
Co-ownership
Concurrent ( 2 or more persons)
Types of Co-Ownership
1) Community Property
2) Tenancy-in-Common
3) Joint Tenancy
4) Community Property with rights of survivorship
5) Tenancy by the Entirety
Community Property
1/2 husbands, 1/2 wives- goes to heirs unless there is a will.
Tenancy-in-common
Unlimited number of owners-Can be not equal. If die their interest goes to heirs.
Partnership
Joint Tenancy
Always has Rights of Survivorship
2 or more people. If one dies the piece go to the others.
To work there has to be equal: Possession Interest Time Title
***Rights of survivorship trumps will
Community Property with Rights of Survivorship
Legally married couple each with own 1/2 interest.
Deed has to say- Community Property with rights of survivorship.
When 1 dies the half of the property goes to the spouse.
Have to record
Benefits- Step up tax basis
Tenancy by the Entirety
Legally married couple/same
Husband and wife only has equal undivided interest
Rights of survivorship does exists. (ROS)
Not in AZ
Used in Non community property states.
Fraud
Intent to harm for gain
Consumer protection- laws to regulate deceptive advertising.
Role of ADRE
Az Department of Real Estate
To protect consumer from the agent.
Mortgage fraud
Intentional lie to a lender to obtain a loan.
