Unit 5 Forms Of Real Estate Ownership

Question 1

Define: Common Elements

Answer 1

Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all the condominium residents. Each condominium owner has an undivided ownership interest in the common elements. 76

Question 2

Define: Community Property

Answer 2

A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage. A holdover of Spanish law found predominantly in the western U.S. states; the system was unknown under English common law. 72

Question 3

Define Condominium

Answer 3

The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, or a separate dwelling unit in a multiunit development, plus an undivided interest in the ownership of the common elements in the building or development, which are owned jointly with the other condominium unit owners. 76

Question 4

Define Cooperative

Answer 4

A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of people living within the building who are the beneficial owners of the trust or shareholders of the corporation, each possessing a proprietary lease to a property unit. 78

Question 5

Define Co-Ownership

Answer 5

Title ownership held by two or more persons. 68

Question 6

Define Corporation

Answer 6

An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. 75

Question 7

Define General Partnership

Answer 7

An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than as a single entity separate from the individual owners. A general partnership is a typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation. A limited partnership is 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 by law responsible for losses only to the extent of their investments. 75

Question 8

Define Joint Tenancy

Answer 8

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 decedent’s interest usually passes to the surviving joint tenant or tenants by the right of survivorship. 69

Question 9

Define Limited Liability Company LLC

Answer 9

A form of business organization that combines the most attractive features of limited partnerships and corporations. 75

Question 10

Define Limited Partnership

Answer 10

An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than as a single entity separate from the individual owners. A general partnership is a typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation. A limited partnership is 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 by law responsible for losses only to the extent of their investments. 75

Question 11

Define Partition Partnership (PITT)

Answer 11

The four unities of tenants in a joint tenancy: possession, interest, time, and title. 70

Question 12

Define right of Survivorship

Answer 12

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 decedent’s interest usually passes to the surviving joint tenant or tenants by the right of survivorship. 69

Question 13

Define Separate Property

Answer 13

Under community property law, property owned solely by either spouse before the marriage, acquired by gift or inheritance during the marriage, or purchased with separate funds after the marriage. 72

Question 14

Define Severalty

Answer 14

Ownership of real property by one person only; also called sole ownership. 68

Question 15

Define Tenancy in Common (TIC)

Answer 15

tenancy in common (TIC) A form of co-ownership by which each owner holds an undivided interest in real property as if each were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have the right of inheritance. 68

Question 16

Define Time-Share

Answer 16

time-share A form of ownership interest that may include an estate interest in property and that allows use of the property for a fixed or variable time period. 79

Question 17

Define Town House

Answer 17

A type of residential dwelling with two floors that is connected to one or more dwellings by a common wall or walls. Title to the unit and lot vest in the owner who shares a fractional interest with other owners in any common areas. 77

Question 18

Define Trust

Answer 18

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, called a beneficiary. The one who conveys the trust is called the trustor. 73

Question 19

Define Administrator

Answer 19

A court-selected person who assists with the settlement of an estate of a person who died without leaving a will. A woman might be called an administratrix, although administrator is the term used most often to refer to either a man or a woman. 114

Question 20

Define Codicil

Answer 20

A supplement or an addition to a will, executed with the same formalities as a will, which normally does not revoke the entire will. 113

Question 21

Define Conveyance

Answer 21

A term used to refer to any document that transfers title to real property. The term is also used in describing the act of transferring.

Question 22

Define curtesy

Answer 22

A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. Most states have recognized other marital property rights and abolished curtesy. 54

Question 23

Define decedent

Answer 23

A person who has died

Question 24

Define descent

Answer 24

Acquisition of an estate by inheritance in which an heir succeeds to the property by operation of law. 111

Question 25

Define determinable fee estate

Answer 25

A fee simple estate providing that the property returns to the original grantor or heirs when a specified condition occurs, indicating that the property is no longer being used for the purpose prescribed.

Question 26

Define dower

Answer 26

The legal right or interest, recognized in some states, that a wife acquires in the property her husband held or acquired during their marriage. During the husband’s lifetime, the right is only a possibility of an interest; upon his death, it can become an interest in land. 112

Question 27

Define executor

Answer 27

An appointed person who carries out the directions of a will. A woman might be referred to as executrix, although executor is the term most commonly used to refer to either a man or a woman. 114

Question 28

Define heir

Answer 28

One who might inherit or succeed to an interest in land under the state law of descent when the owner dies without leaving a valid will. 53

Question 29

Define holographic will

Answer 29

A will that is written, dated, and signed in the testator’s handwriting. 113

Question 30

Define incorporeal right

Answer 30

A nonpossessory right in real estate (e.g., an easement or a right-of-way).

Question 31

Define legacy

Answer 31

A disposition of money or personal property by will. 112

Question 32

Define legally competent parties

Answer 32

People who are recognized by law as being able to contract with others; those of legal age and sound mind. 202

Question 33

Define life tenant

Answer 33

A person in possession of a life estate. 54

Question 34

Define nuncupative will

Answer 34

An oral will declared by the testator in his final illness, made before witnesses and afterward reduced to writing; not permitted by all states. 113

Question 35

Define testamentary trust

Answer 35

A trust that is established by will after one’s death. 74

Question 36

Define land trust

Answer 36

A trust in which property is conveyed, and in which real estate is the only asset. 74

Question 37

living trust

Answer 37

A trust that is created during the trustor’s lifetime. 73