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48-Hour RE Course > Unit 4: Forms of Real Estate Ownership > Flashcards

Unit 4: Forms of Real Estate Ownership Flashcards

1
Q

Real estate may be held in one of three ways:

A
  1. Ownership in severalty (one owner)
  2. Co-ownership (more than one owner)
  3. Ownership by a trust (property held for the benefit of another
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2
Q

Ownership in severalty occurs when…

A

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

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3
Q

The owner in severalty has sole rights to the property and sole discretion to….

A

sell, lease, leave as a bequest in a will, or otherwise transfer part or all of the ownership rights to another person

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4
Q

Co-ownership (or concurrent owners)

A

when a title to a parcel of real estate is held by two or more individuals

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5
Q

Forms of co-ownership

A
  • Tenancy in common (TIC)
  • Joint tenancy
  • Tenancy by the entirety
  • Community property
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6
Q

Tenancy in common (TIC)

A

Each tenant holds an undivided interest in the property.

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7
Q

In TIC, co-owners have unity of possession, meaning that each owner is…

A

entitled to possession and use of the entire property, even though each holds only a fractional ownership interest

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8
Q

If no fractions are stated in the deed creating a TIC, the tenants are presumed to hold equal shares

A

True

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9
Q

A share owned by a married couple can be transferred only with the agreement of both parties.

A

True

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10
Q

The TIC has become popular in expensive urban areas because it allows a multi-family dwelling to be sold to multiple owners without the need to convert the entire property to the condominium form of ownership (long and expensive process).

A

True

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11
Q

The downside of co-owner’s TIC interest is that it may not be as easy to _________ as property held in a different form of ownership.

A

sell

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12
Q

Joint Tenancy

A

property owned by two or more people whether married or unmarried. The distinguising feature is right of surviorship.

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13
Q

Right of Survivorship

A

Upon the death of a joint tenant, the deceased’s interest transfers directly to the surviving joint tenant or tenants.

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14
Q

The last survivor takes title in severalty and has all the rights of sole ownership, including the rights to pass the property to any heirs.

A

True

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15
Q

A joint tenancy can be created only by the ____ act of conveying a deed or giving the property by will or living trust

A

intentional

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16
Q

To create a joint tenancy, four elements or unities are needed (PITT)…

A
  • Unity of possession
  • Unity of interest
  • Unity of time
  • Unity of title
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17
Q

unity of possession

A

all joint tenants hold are undivided right to possession

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18
Q

Unity of interest

A

all joint tenants hold an equal ownership interest

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19
Q

Unity of time

A

all joint tenants acquire their interests at the same time

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20
Q

Unity of title

A

all joint tenants acquire their interests by the same document

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21
Q

The four requirements or unities are met when the right to posession of a property is acquired by all of the joint owners by means of a single instrument that conveys an equal undivided interest to all of them, stipulating that they are to be joint owners “with the right of surivorship”

A

True

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22
Q

A joint tenancy is destroyed when…

A

any one of the four unities of joint tenancy is terminated

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23
Q

If the joint tenacy has more than two owner to begin with, and one of them conveys that interest, there will still be a joint tenacy but only as to the interests held by the remaining joint tenants; the new owner is a…

A

tenant in common (TIC)

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24
Q

Partition

A

a legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to its termination

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25
Q

Tenancy by entirety

A

special form of co-ownership used in some states that allows a spouse to inherit the other spouse’s ownership interest upon death

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26
Q

Early common law viewed a married couple as

A

one legal person (entirety)

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27
Q

Community Property Law

A

any property acquired during marriage is considered to be obtained by mutual efforts

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28
Q

Separate property

A

real or personal property that was owned soley 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

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29
Q

Any conveyance or encumbrance of community property requires the signatures of both spouses in ______ property.

A

Community

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30
Q

Trust

A

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

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31
Q

Trustor

A

creates the trust

32
Q

beneficiary

A

the person who benefits from the trust

33
Q

Trustee

A

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

34
Q

Fiduciary

A

A person who acts in confidence or trust and has a special legal relationship with the beneficiary

35
Q

Living trust

A

created by agreement during the property’s owner’s lifetime

36
Q

Testamentary Trust

A

established by will after the owner’s death

37
Q

Trustors expect that the trustee will complete certain duties indicated such as care and investment of the trust assets to produce an income.

A

True

38
Q

Living trusts minimize the time and costs of probate

A

True

39
Q

The trustee is often the trustor

A

True

40
Q

Upon the death of the trustee, the property passes to the beneficiary or beneficiaries without the need for probate.

A

True

41
Q

Land trust

A

Real estate is the only asset and the beneficiary is also the trustor which can help them manage, control, right of posession, right of income or proceeds. Continue on definitie terms, usually 20 years

42
Q

One of the distinguishing charachteristics of a land trust is that the public records usally do not….

A

name the beneficiary

43
Q

A beneficial interest in property can be transferred by assignment

A

True

44
Q

The beneficial interest in property can be pledged as security for a loan without having a mortgage recorded

A

True

45
Q

Ownership by a business organization makes it possible for many people to hold an interest in the same parcel of real estate

A

True

46
Q

Partnership

A

an association of two or more people who carry on a business for profit as co-owners

47
Q

General Partnership

A

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

48
Q

Limited Partnership

A

Consists of one or more general partners, as well as limited partners

49
Q

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

A

True

50
Q

Limited partnership allows for investors to organize and invest small amounts of capital to a large real estate project with minimal risk

A

True

51
Q

Uniform Partnership Act

A

Provides for the continuation of the existing business even under the circumstances of partners death, withdrawl, or bankruptcy

52
Q

Corporations

A

a legal entity created under the authority of the laws of the state from which it receives its charter

53
Q

Board of Directors

A

Manage and operate the corporation and are elected by its shareholders

54
Q

BC the Corporation is a legal entity, it can own real estate in SEVERALTY or as TENANT IN COMMON with other natural/articial persons

A

True

55
Q

LLC

A

combines the most attractive features of limited partnerships and corporations. Members enjoy the limited liability of a corp, tax advantages of a partnership-income flows directly to members and is not faced with double taxation

56
Q

Condominiums, cooperatives, and time-share arrangements are three types of property ownership that have arisen in residential, commercial, and industrial markets

A

True

57
Q

Condominiums

A

Single units are located in lowrise and highrise complexes, as town houses or stand-alone units

58
Q

____ owners have fee title to interior space of units and share title to common areas

A

Condominium Ownership

59
Q

Condominiums are transferred by

A

deed, will, or living trust

60
Q

Cooperative

A

single units are located in lowrise and highrise complexes

61
Q

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

A

Cooperative Ownership

62
Q

Shareholders may sell or transfer shares. Check bylaws.

A

Cooperative Transfers

63
Q

Time-share

A

Multiple purchasers buy interests in real estate-usually resort or hotel property. Each purchaser has right to use unit for set time each year or a number of usuage points

64
Q

Fee simple interest. Use agreement is personal property that expires after a specified time period.

A

Time-Share Ownership

65
Q

Time-share Transfer

A

An interest in a time-share estate may 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.

66
Q

Horizontal property acts

A

Also known has Condominium laws, the owner of each unit holds a fee simple title to the unit

67
Q

Common elements

A

land, coutryard, lobbies, the exterior structure, hallways, elevators, stairways, and the rood, as well as recreational facilities like pools, tennis coutrs, and golf courses

68
Q

Lowrises, town houses that share a wall, and detached structure can all be condominiums

A

True

69
Q

RIght of first refusal

A

the owner is required to offer the unit at the same price to the other owners in the condominium or the association before accepting an outside purchase offer.

70
Q

In a ________, a corporation holds title to the land and the building, which the corporation sell shares of stock to prospective tenants

A

Cooperative

71
Q

In a Cooperative, the purchaser becomes a shareholder in the corporation by virtue of stock ownership and receives a proprietary lease to the apartment for the life of the corporation

A

True

72
Q

Cooperative tenant-owners do not own real estate instead they own an interest in a corporation that has only one asset: the building

A

True

73
Q

An important issue in most cooperatives is the

A

method by which shares in the corporation may be transferred to new owners

74
Q

The burden of any defaulted payment in a cooperative falls on…

A

the remaining shareholders

75
Q

Approval of prospective tenants by the board of directors in a cooperative will include_________ because the property may be sold by court order in a foreclosure suit.

A

financial evaluation

76
Q

time-share use is a contract right under which______ owns the real estate

A

the developer

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