Unit 4 - Forms of Real Estate Ownership Flashcards
What is Ownership in Severalty
When property is owned by one individual, corporation or other entity
What is Co-Ownership
When title to a parcel of real estate is held by two or more individuals.
Also called concurrent owners.
What are the 4 forms of Co-Ownership
Tenancy in Common (TIC), Joint Tenancy, Tenancy by the Entirety, and Community Property
What is a Tenancy in Common (TIC)
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.
What is Joint Tenancy
Property owned by two or more people, whether married or unmarried. Distinguishing feature is the right of survivorship.
What is Right of Survivorship
In a Joint tenancy, upon the death of the joint tenant, the deceased’s interest transfers directly to the surviving tenant. (One less owner)
What are 4 Unities necessary to create a Joint Tenancy (PITT)
Possession, Interest, Time, Title (All must occur at same time)
What is a Partition Suit
A legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to it’s termination
What is Tenancy by the Entirety
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.
What are Community Property Rights
Law based on spouses being equal partners in the marriage. Any property acquired during a marriage is considered to be obtained by mutual effort.
What is Separate Property
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.
What is a Trust
A device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
What is a Trustor
A person who creates the trust
What is a Trustee
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.
What is a Beneficiary
The person who benefits from the trust
What is a Fiduciary
The role of the trustee, a person who acts in confidence or trust that has a special legal relationship with the beneficiary
What is a Living Trust
A trust created by agreement during the property owner’s lifetime.
What is a Testamentary Trust
A trust established by will after the owner’s death.
What is a Land Trust
Real estated is only asset of a land trust. Trustor and beneficiary are the same person.
What is a Partnership
An association of two or more persons who carry on a business for profit as co-owners.
What is a General Partnership
All the partners participate in the operation and management of the business and share full liability for losses and obligations.
What is a Limited Partnership
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.
What is a Limited Partnership
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.
What is Corporation
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.
