Unit 5 - part 1 Flashcards
How many form of ownership exist and what they are?
- ownership in severalty (one owner)
- co-ownership (more than one owner)
- ownership by trust (property held for the benefit of another).
What is ownership in severalty?
Ownership in severalty occurs when property is owned by one individual, corporation, or other entity. The owner is severalty has sole rights to the property and sole discretion to sell, will, lease, or transfer part or all the ownership rights to another person.
When co-ownership occur?
When title to a parcel of RE is held by two or more individuals, those parties are called co-owners or concurrent owners.
What form of co-ownership exist and when difference become apparent?
Individuals may co-own property as:
- Tenancy in common
- Joint tenants
- Tenants by the entirety
- Community property
Only when property is conveyed, or when one of the owners dies, the difference will become apparent.
What is tenancy in common (TIC)?
In TIC, each tenant holds an undivided interest in the property. The co-owners have unity in possession, meaning that each owner is entitled to possession and use of the entire property, even though each holds only a fractional ownership interest. It’s the ownership interest, not the property, that is divided.
Because the co-owners own separate interests, they can sell, convey, mortgage or transfer their individual interest in the TIC without the consent of the other co-owners.
A share owned by married couple can be transferred only with the agreement of both parties.
No individual tenant may transfer the ownership of the entire property.
When one co-owner dies, the tenant’s undivided interest passes according yo the decedent’s will, to the heirs identified by statue if there is no will, or by the terms of the decedent’s living trust.
What is joint tenancy?
Property owned by two or more people, whether married or unmarried.
The distinguishing feature of a joint tenancy is the right of survivorship. Upon the death of a joint tenant, the deceased’s interest transfers directly to the surviving joint tenant or tenants. No formal legal action is required.
The last survivor takes title in severalty and has all the rights of sole ownership.
Unless prohibited by state law, joint tenants are free to convey their individual interest in the jointly held property. This means that the new owner cannot be a joint tenants, but instead is a tenant in common.
How joint tenancy can be created?
Four elements or unites are needed, which can be remembered as PITT:
- unity of possession
(all joint tenants hold an undivided right of possession) - unity of interest
(all joint tenants hold an equal ownership interest) - unity of time
(all joint tenants acquire their interest at the same time) - unity of title
(all joint tenants acquire their interest by the same document)
How joint tenancy can be terminated?
A joint tenancy is destroyed when any one of the four unities of joint tenancy is terminated.
Terminations of co-ownership by Partition Suit?
Partition is a legal way to dissolve the relationship between co-owners of RE when the parties do not voluntarily agree to its termination.
If the court determines that property cannot be decided physically into separate parcels without destroying its value, the court will order the RE sold. The proceeds of the sale will that be divided among the co-owners according to their fractional interests.
What ownership form by married couples can be?
- Tenancy by the entirety
2. Community property rights
What is tenancy by entirety?
It’s a special form of co-ownership used in some states that allows a spouse to inherit the other spouse’s ownership interest upon death. In this form of ownership, each spouse has an equal, undivided interest in the property.
Spouses who are tenants by the entirety have the right of survivorship. During their lives, they can convey title only by a deed signed by both parties. One party cannot convey a one-half interest, and generally they have not right to partition or divide the property.
What are community property rights?
Any property acquired during a marriage is considered to be obtained by mutual effort. There are two kinds of property:
- 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)
- community property (real or personal property acquired by either spouse during the marriage. Any conveyance or encumbrance of community property requires the signatures of both spouses. Spouses can will their half of the community property to whomever they desire. Community property does not provide the automatic right of survivorship that joint tenancy does.)
