Unit 4 - Forms of Real Estate Ownership

Question 1

What is Ownership in Severalty

Answer 1

When property is owned by one individual, corporation or other entity

Question 2

What is Co-Ownership

Answer 2

When title to a parcel of real estate is held by two or more individuals.
Also called concurrent owners.

Question 3

What are the 4 forms of Co-Ownership

Answer 3

Tenancy in Common (TIC), Joint Tenancy, Tenancy by the Entirety, and Community Property

Question 4

What is a Tenancy in Common (TIC)

Answer 4

Each tenant hold an undivided interest in the property and they have unity of possession. Each co-owner can sell, convey, mortgage, or transfer their individual interest.

Question 5

What is Joint Tenancy

Answer 5

Property owned by two or more people, whether married or unmarried. Distinguishing feature is the right of survivorship.

Question 6

What is Right of Survivorship

Answer 6

In a Joint tenancy, upon the death of the joint tenant, the deceased’s interest transfers directly to the surviving tenant. (One less owner)

Question 7

What are 4 Unities necessary to create a Joint Tenancy (PITT)

Answer 7

Possession, Interest, Time, Title (All must occur at same time)

Question 8

What is a Partition Suit

Answer 8

A legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to it’s termination

Question 9

What is Tenancy by the Entirety

Answer 9

A special form of co-ownership used in some states that allows a spouse to inherit the other spouses’s ownership interest upon death. One indivisible unit and have right of survivorship.

Question 10

What are Community Property Rights

Answer 10

Law based on spouses being equal partners in the marriage. Any property acquired during a marriage is considered to be obtained by mutual effort.

Question 11

What is Separate Property

Answer 11

Real or personal property that was owned solely by either spouse before marriage, acquired by gift or inheritance by one spouse during the marriage, or purchased with separate funds during the marriage.

Question 12

What is a Trust

Answer 12

A device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.

Question 13

What is a Trustor

Answer 13

A person who creates the trust

Question 14

What is a Trustee

Answer 14

The party who hold legal title to the property and is entrusted with carrying out the trustor’s instructions regarding the purpose of the trust.

Question 15

What is a Beneficiary

Answer 15

The person who benefits from the trust

Question 16

What is a Fiduciary

Answer 16

The role of the trustee, a person who acts in confidence or trust that has a special legal relationship with the beneficiary

Question 17

What is a Living Trust

Answer 17

A trust created by agreement during the property owner’s lifetime.

Question 18

What is a Testamentary Trust

Answer 18

A trust established by will after the owner’s death.

Question 19

What is a Land Trust

Answer 19

Real estated is only asset of a land trust. Trustor and beneficiary are the same person.

Question 20

What is a Partnership

Answer 20

An association of two or more persons who carry on a business for profit as co-owners.

Question 21

What is a General Partnership

Answer 21

All the partners participate in the operation and management of the business and share full liability for losses and obligations.

Question 22

What is a Limited Partnership

Answer 22

Consists of one or more general partners, as well as limited partners. Limited partners are not legally permitted to participate, and can be held liable for business losses only to the amount invested.

Question 22

What is a Limited Partnership

Answer 22

Consists of one or more general partners, as well as limited partners. Limited partners are not legally permitted to participate, and can be held liable for business losses only to the amount invested.

Question 23

What is Corporation

Answer 23

A legal entity (an artificial person) created under the authority of the laws of the state from which it receives its charter. Managed and operated by its board of directors.

Question 24

What is a Limited Liability Company (LLC)

Answer 24

Combines most attractive features of limited partnerships and corporations. Offers tax advantage, by income flowing directly to member instead of double taxation of a corporation.

Question 25

What is a Condominium Ownership

Answer 25

Form of fee simple ownership, where the individual unit owners also own a specified share of the undivided interest in the rmainder of the building and the land.

Question 26

What are Common Elements

Answer 26

Regarding condos, Include items such as land, courtyards, lobbies, stairways, recreational facilities, etc.

Question 27

What is Right of First Refusal

Answer 27

Owner of condo is required to offer the unit at the same price to the other owners in the association before accepting an outside purchase offer.

Question 28

What is Cooperative ownership

Answer 28

Corporation holds title to the land and offers shares of stock to prospective tenants. Shareholders recieve a proprietary lease to apartment for the life of the corporation. Own interst only, not real estate.

Question 29

What is Time-Share Ownership

Answer 29

Allows multiple purchasers to buy small interests in real estate. (usually resort properties). Includes real estate property interest in a specified unit for a particular period of the year.

Question 30

What is Membership Camping

Answer 30

Similar for of time-share use. Purchases the right to use developer’s facilities, such as camper and trailer hookups and restrooms.