Unit 4 Flashcards
Severalty
Ownership of real property by one person only; also called sole ownership
Co-ownership
When the title to a parcel of real estate is held by two or more individuals.
Tenancy in common
A form if co-ownership by which each owner holds an undivided interest in real property as if each were sole owner. The co-owners have “unity of possession” and use of the entire property, even though each holds only fractional ownership interest. It is the ownership interest, not the property, that is divided.
Two or more owners
Each has undivided interest in the property
Shares can be equal or unequal
Interests can be conveyed seperately
Tenancy in common
Joint tenancy
Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of a joint tenant, the decendent’s interest usually passes to the surviving tenant(s) by the right of survivorship.
Two or more owners
Each has undivided and equal interest
Right of survivorship
Terminated by transfer of interest
Joint tenancy
4 elements or unities are needed to create a joint tenancy… (PITT)
-Unity of possession
-unity of interest
-unity of time
-unity of title
Unity of possession
All joint tenants hold an undivided right to possession
Unity of interest
All joint tenants hold an equal ownership interest
Unity of time
All joint tenants acquire their interests at the same time
Unity of title
All joint tenants acquire their interests by the same document
Partition
The devision if co-tenants’ interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through a court procedure.
A legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to its termination; if the court determines that the parcel of land cannot physically be divided inti separate parcels without destroying its value, the court will order the real estate be sold and the proceeds be divided between co-owners. This is an example of…
Partition
Tenancy by the entirety
A special form of co-ownership used in some states that allows a spouse to inherit the other spouse’s ownership upon death. In this form of ownership, each spouse has an equal, undivided interest in the property. Entirety refers to the fact that owners are considered one indivisible unit because early common law viewed a married couple as one legal person.
Available to spouses
Survivor inherits the other spouse’s share
Tenancy by the entirety
Community property
A system if property ownership based in the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage.
Available to spouses
All property that is not separate property
Each spouse’s interest transferrable by will
Community property
Separate property
Generally is real or personal property that was owned solely by either spouse BEFORE the marriage, acquired by gift or inheritance by one spouse during the marriage, or purchased with separate funds during the marriage.
Trust
A fiduciary arrangement whereby property is conveyed to a person or an institution, called a trustee, to be held and administered on behalf of another person.
A device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party
A trust
A living trust
Trust created by agreement during the property owner’s lifetime
Testamentary trust
Established by will after the owner’s death
Quick note
Neither a living trust nor a testamentary trust is related to the document called a living will, which deals with the right ti refuse medical treatment
The person who CREATES the trust CONVEYES real or personal property to a trustee (usually a corporate trustee), with the understanding that the trustee will assume certain duties.
These duties may include the care and investment of the trust assets to produce an income. After paying the trust’s operating expenses and trustee’s fees, the income is paid to or used for the benefit of the beneficiary.
Land trust
-Frequently created fir the conservation of farmland, forests and other wildlife habitats, coastal land, and scenic vistas.
-trustor is usually also the beneficiary
-beneficiary retains management and right of possession as well as the right to any income produced by the property or proceeds from its sale.
-may be used for secrecy as public records usually do not name the beneficiary
Quick note
Holding property in a trust is not just an option for those who wish to keep their ownership of property private from s public view. A living trust can be used ti transfer title to property without the formality of either a will or a probate proceeding.
Partnership
An association if two or more persons who carry on a business for profits as co-owners.
General partnership
A typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operations.
Limited partnership
A business arrangement whereby the operation is administered by one or more general partners and funded, by and large, by limited or silent partners, who are responsible for losses only to the extent if their investments
Partnership notes
-business is ran by general partner(s)
-limited partners are not legally permitted to participate, with the result that each can be held liable for business losses only to the amount invested.
-limited partnerships are popular methods of organizing investors because it permits investors with small amounts to participate in large real estate projects with minimum personal risk.
More partnership notes
If a partner in a general partnership dies, withdraws, or goes bankrupt, the traditional common law result would be to dissolve the partnership, which could be recognized as a partnership of the surviving partners in order to conduct business.
-uniform partnership act
-in a limited partnership, the partner agreement may provide for the continuation of the organization after the death or withdrawal of one of the partners
Coorperation
A legal entity or organization, created by operation of law, whose rights of doing business are essentially the same as an individual. The entity has continuous existence until it is dissolved according to legal procedures.
Limited liability company (LLC)
A form of business organization that combines the most attractive features of limited partnerships and corporations.
Condominium description
Single units located in mow-rise and high-rise complexes, as stand alone units or town houses.
Cooperative description
Single units in low-rise or high-rise complexes.
Time share description
Multiple purchasers buy interests in real estate- usually resort or hotel property. Each purchaser had the right ti use unit for set time each rear or a number of usage points
Condominium ownership
Owners have fee title to interior space of units and share title to common areas.
Cooperative ownership
Tenants own shares in a corporation, partnership, or trust that holds title to the building. Tenants have proprietary leases and the right to occupy their respective units.
Time-share ownership
Time-share estate is a fee simple interest. Time-share use agreement is personal property that expires after a specified time period.
Condominium transfer
Single units are transferred by deed, will, or living trust.
Corporate transfer
Shares are personal property. Shareholders may sell or transfer shares. Transfer of shares may be restricted by laws.
Time-share transfer
All interest in a time-share estate must be conveyed by deed or will by the owner. An interest in time-share use is personal property that may or may not be transferable according to the contract.
Governance of condominium
Declaration of condominium and board if directors elected by homeowners.
Governance of corporate
Bylaws of the corporation and board if directors elected by shareholders.
Governance of time-share
The developer
