Unit 3: Ownership of Real Property Flashcards
A fee simple estate and a life estate are:
Freehold Estates
The highest form of ownership is
The fee simple absolute
Victor and Karen are not married but together own community property because they are
Registered Domestic Partners
A fee simple estate that may be lost when some act is performed is:
A fee simple on condition of subsequent
A fee simple estate that has no conditions is:
a fee simple absolute
If Greenacre is deeded by Lou to Mary for Mary’s life, Mary has:
A life estate
If Greenacre is deeded by Lou to Mary for Mary’s life, Lou has:
an estate in reversion
When Aunt Winfred died, she left a life estate in Whiteacre to her nephew George. When George dies, Whiteacre will go to George’s daughter Elizabeth. Elizabeth is:
A remainderman
If Greenacre is deeded by Lou to Mary for the life of Nancy, Nancy has:
No interest
The owner of a life estate can
Sell only the life estate
Joint tenants have unity of
Time, title, interest, and possession
Jessica and John own Blackacre as joint tenants. Jessica’s will specifies that on her death her interest in Blackacre is to go to her sister Mona. When Jessica dies:
John will be the sole owner of Blackacre.
Three joint tenants share an interest in a property. If one Joint tenant’s share is sold using the proper legal formalities, the new owner will then be:
A tenant in common with the other joint tenants.
Community Property is:
All property acquired by a spouse or registered domestic partner that is not separate property.
One of the forms of concurrent ownership is:
Tenancy in partnership
A partner has:
The right to possession of partnership property for partnership purposes.
Absolute control, as well as absolute liability, belongs to:
A sole proprietor
When doing business in California, a corporation chartered in California is:
A domestic corporation
Title to a spouse’s marital property can be transferred upon death by use of
A living Trust
A limited partner is:
Not liable for partnership debts beyond the amount invested.
Estate=
Ownership
Freehold Estate
Indefinite duration of ownership. Fee Simple, Fee Simple Defeasible, and Life Estate.
Fee Simple Estate
Type of freehold estate. The highest form of modern land ownership. Ownership of the building and the land. No conditions are attached to the ownership.
Fee Simple Defeasible
Type of freehold estate. Ownership of building and land but with a condition. Sometimes called Fee Simple Subject to Power of Termination. Breach of conditions can result in loss of title.
Life Estate
Type of freehold estate. Estate lasts only as long as the life of the person listed on the deed or will that creates the estate.
2 Things holder of life estate cant do
- Will it to someone else
- Commit waste upon the property
Estate in Reversion
I sell you a property on a life estate. You die, the property reverts back to me. If I die first, when you die, the property goes to my heirs.
Estate in Remainder
(Off to the side) I sell or give property to you on a life estate. Once you die, it goes to the Betty Ford Clinic for substance abuse.
Lease Hold Estate
Less than a freehold estate. Not ownership but for use only.
Ownership in Severalty
Separate ownership by one person
Concurrent Ownership
Ownership by two or more entities at the same time.
3 Types of Concurrent Ownership
- Joint tenancy
- Community property
- Tenancy in Partnership
Right of survivorship
Upon the death of one of the joint tenants, the deceased share goes to the surviving tenant. Escapes probate and existing unsecured debt. Cannot will your share.
Joint Tenancy
A special form of co-ownership.
Joint Tenancy Unities Acronym (TTIP)
T- Unity of Time (each takes title at the same time)
T- Unity of Title ( each receives title through the same deed)
I- Unity of Interest (each owns an equal share)
P- Unity of Possession ( each has the right to use all of the property)
Tenancy in Common
No right of survivorship. Only have Unity of Possession. You can will your share.
When no vesting is mentioned in the deed and the parties are not married, the law will presume:
Tenancy in Common
Community Property
real or personal property acquired by a spouse during the marriage or by a registered domestic partner.
Separate Property
Possessions acquired before marriage
Community Property with right of survivorship
The deceased share goes to the surviving tenant (same as joint tenancy)
Business Ownership of Real Estate- Sole Proprietorship
Simplest form. You’re personally liable.
Business Ownership of Real Estate- Corporation
A separate, legally recognized entity, apart from owners. Limits liability of officers, directors, and shareholders.
Business Ownership of Real Estate- S-Corp
Avoids double taxation
Business Ownership of Real Estate- Partnership
Like two sole proprietors coming together to share liability.
Business Ownership of Real Estate- Limited Partnership
A general partner makes decisions with unlimited liability. Limited Partners are only liable for up to the amount invested.
Limited Liability Company (LLC)
Another corporate structure but taxes and fees are higher than a partnership.
Real Estate Investment Trust (REIT)
Holds various forms of real estate or mortgages for the benefit of investors who own shares of the trust.
