Unit 4 Flashcards
Tenancy in Severalty
property is owned by one individual, corporation or other entity
Tenancy in co-ownership
held by two or more people
Tenancy in common
each tenant holds an undivided interest in the property (do not have to own equal shares of the property)
Joint Tenancy
property owned by two or more people whether married or unmarried owning equal shares of the property
Right of survivorship
upon death of a joint tenant, the deceased’s interest transfers directly to the surviving joint tenant or tenants
4 Unities for JTROS
- Possession
- Interest
- TIme
- Title
Possession
all joint tenants hold an undivided right to possession
Interest
all joint tenants hold an equal ownership interest
Time
all joint tenants acquire their interests at the same time
Title
all joint tenants acquire their interests by the same document
unity of possession
each owner is entitled to possession and the use of the entire property, even though each holds only a fractional ownership interest
If tenancy is not stated for co-owners, what time is it assumed to be?
common tenancy
Do you need the permission of other owners to sell your interest in a joint tenancy?
no
Partition Suit
a legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to its termination
Tenancy by entirety
special form of co-ownership that allows a spouse to inherit the other spouse’s ownership interest upon death; each spouse owns the property 100%; no need to go through probate
What is the default tenancy for married people
tenancy by entirety
Community Property
property bought together as a married couple, should one of the spouses die, 50/50 ownership and they can will it away to their spouse or someone else
Are community property rights recognized in TN
No
Separate property
either spouse owned before they were married, and remains separate
What are the community property rights?
- separate property
2. community property
Trust
device by which one person who owns the property transfers the ownership to someone else to hold or manage for the benefit of someone else
Who are the 3 parties involved in a trust?
- trustor
- trustee
- beneficiary
Living Trust
created by agreement during the property owner’s lifetime
Trustor
person who creates the trust
Trustee
party who holds legal title to property in trust and is entrusted with carrying out the trustor’s instructions regarding the purpose of the trust
Beneficiary
person who benefits from a trust
Fiduciary
person who acts in confidence or trust and has a special legal relationship with the beneficiary
Testamentary trust
set up after death
Land trust
still have trustor, trustee and beneficiary, but often the trustor and trustee are one in the same
Ownership of business by yourself
sole proprietorship
general partnership
all partners participate in the operation and management of the business and share full liability for business losses and obligations
Limited partnership
one or more general partners + limited partner (invest in it and reap some profits but doesn’t help them run it; also called a silent partner; losses limited to the amount you’ve invested the business)
Corporation
legal entity that can own real estate in its own name; owns in severalty
Limited Liability Corporation
incorporates features of limited partnerships and corporations, make for personal asset protection and without need for board of directors
What do you get ownership of in a condo?
interior airspace
common area
anything outside the interior everyone owes a small share of and is owned by HOA
Who is condo property administered by?
HOA
Cooperative ownership
can’t tell the difference just by looking; the whole place is owned by a corporation and you buy into the corporation and you get a share of stock; has to give you a second document that allows you to have your proprietary lease
What is the value of a unit in a cooperative ownership
value of stock
Does a board of directors in a cooperative have the right to refuse someone’s stock ownership?
yes
Who is responsible is someone in a cooperative defaults on their taxes?
whole place
where are cooperatives normally located?
urban areas
time share ownership
permits multiple purchasers to buy relatively small interests in real estate, typically resort properties
What are ways to buy into a time share
- timeshare estate
2. timeshare use
Timeshare estate
get deed for your time interval ownership; yours forever, can will to heirs, can get a loan to buy
Timeshare use
buy into timeshare but developer retains ownership and gives buyer limited time to use it
Time share sales agent
person who sells or offers to sell timeshare intervals in a time-share program to a purchaser. All sales agents must have a time-share salesperson license. Pre-licensing requirements of 30 hour horse by the time-share broker
What are the cancellation rights for the time share if you saw the property?
10 days if the prospective buyer had an on-site inspection of the property
What are the cancellation rights for a time share if you did not see the property?
15 days if the prospective buyer did not have an on-site inspection of the property
What type of license must time share agents have?
All agents must have a real estate license of some type (time-share license, affiliate broker license, or broker license)
Who are time share deposits held by?
third party (attorney, bank, title company, etc.)
What are the rules around time shares as a prize/gift?
- If a sales presentation is required to qualify, it must be stated
- At least 1 of each prize/gift must be given
- The odds of winning the prize/gift must be stated
- The retail value of each prize/gift must be stated
What must time share developers have?
public offering disclosure statement
What must prospective buyers do for a time share?
sign and date a receipt acknowledging they received this statement
How long do time share developers need to keep their receipts and records of sales?
4 years
What happens if any changes are made to a Public Offering Disclosure statement?
the Developer must submit them to the Tennessee Real Estate Commission within 10 days and the Developer cannot offer the time-share property to the public until TREC approves the change(s)
