Unit #3 - Ownership of Real Property Vocab Flashcards
Beneficiary
A person who derives advantage from something, especially a trust, will, or life insurance policy.
Commingling
A violation of Real Estate Laws. Placing the licensee’s own money in the same account with the money of others (clients). Maximum of $200 is allowed to cover account fees.
Community Property
Property aquired by spouses during marriage
Community Property with right of survivorship
With the right of survivorship, title passes ot the surviving spouse without probate, just as if it were held in joint tenancy. Prior to the death of either spouse, the right of survivorship can be terminated.
Concurrent Ownership
Two or more people that share the unity of posession. Meaning each tenant has the right to use the entire property.
Condition Subsequent
A fee simple estate subject to a condition subsequent, there is some action or activity that the fee simple owner must NOT perform. If the condition is broken the former owner can retake possession of the property
Corporation
Every state has specific laws regulating the formation, corporation, and dissolution of corporations. Owners of a corporation are called shareholders
Estate
An extensive area of land in the country, usually with a large house, owned by one person, family, or organization.
Estates of Tenancy
Instead of an ownership interest, the tenant has the right to use the property for the stated period. The length of the lease term determines the type of tenancy.
Fee Simple Absolute
The highest form of ownership in real property us the estate in fee simple absolute. Owned completely, without any limitations or conditions.
Fee Simple Estate
termed a “present, possessory interest.” Carries the maximum bundle of rights. The owner of the fee simple estate has the right to use the property right now and for an indefinite period in the future.
Freehold Estate
In medieval England this was the highest form of land ownership. The owner of a freehold estate in land could use the property in any way, without being subject to the demands of the overlord.
Todays owner of real estate also enjoys a freehold estate but there usually are some restraints on how the land may be used.
General Partnership
Established when two or more persons carry on a business for profit as co-owners. Property owned by the partnership is owned by the individual partners as a tenancy in partnership.
Inter Vivos Trust
Also known as the living trust is an increasingly popular form of property ownership. A living trust can be used to hold title property during the lifetime of the trustor, who is also named as the trustee of the trust.
Joint Tenancy
Special form of co-ownership. It requires that all co-owners take title to the property at the same time, by the same document. In addition each must have an equal share of the property.
T - unity of time
T - unity of title
I - unity of interest
P - unity of possession
Leaseholds
Or estates of tenancy. Instead of an ownership of interest, the tenant has the right to use the property for the stated period.
Life Estate
A life estate refers to property owned by an individual during their lifetime and prevents beneficiaries from selling the property before death.
Life Tenant
The person who holds the life estate is the life tenant. The life tenant may have the right to occupy a residential property and/or the right to income from property that is rented or leased to others. Unless specially restricted, a life estate can be sold, leased or mortgaged.
Limited Liability Company (LLC)
Almost all states permit property ownership by a limited liability company. In California an LLC is created by filing a one page form with the secretary of state. LLC members are not required to have a written operating agreement setting out their rights and responsibilities although one is advisable. No restriction on number of shareholders. Higher taxes due to limited liability.
Limited Partnership
To avoid unlimited liability of being a general partner, an investor can take part in a limited partnership. This can be created only in compliance with state law. By law limited partners can take NO part in the management pf the partnership. If they do they will become general partners and will lose their limited liability
Living Trust
Like a will, a living trust is a legal document that lets you distribute your possessions to people and organizations after you die. A living trust “owns” the property you put into it, while still allowing you to maintain control. You can put most types of assets into a living trust, as long as they have value.
Measuring Life
The measuring life is that of the holder of the life estate. Typically,property is given or left by will to someone to use “for and during their natural lifetime”and then the document specifies who gets the property afterward.
Ownership in Severalty
Also called separate ownership or sole ownership is ownership by one person. Also the one responsible to pay the taxes.
Partition Action
Partition actions are when one party to jointly-owned property or a business wants to sell their ownership rights. Business litigation and partnership disputes happen all the time and the remedy is a partition action that occurs in a court of law. Parties owning property usually sell the property.