Unit 7 Flashcards
Ownership in Severalty
title is held by one individual or company
Co Ownership
title is held by two or more people
- Tenancy in common
- Joint tenancy
- Tenancy by the entireties
- Community property
Tenancy in common
Each tenant holds an undivided fractional interest in the property. Default. Can sell, convey, mortgage, or transfer their individual interest without consent from the other co-owner. At death each owners interest transfers according to their will, heirs, or living trust.
Joint Tenancy
Owned by two or more people. Right of survivorship- upon death of a joint tenant the deceased interest transfers directly to the surviving tenant or tenants. Just one less owner. Must be clearly stated.
- unity of. possession
- unity of interest
- unity of time
- unity of title
Requirements
- Title is acquired by one document or deed
- the deed is executed and delivered at one time
- the deed conveys equal interests to all of the parties
- the parties hold undivided possession of the property as joint tenants
Partition
Legal way to dissolve the relationship when the parties do not voluntarily agree to the termination of co ownership.
Tenant by Entirety
Legally Married- Spouse gets other spouses interest when they die. Terminated by Judgement sale Death Agreement Divorce
Community Property Rights
Real and personal property acquired by either spouse during marriage. Partners in marriage are equal. Property is obtained by mutual effort. Will their property to whoever they choose. No automatic right to survivorship.
Separate property
Real or personal property that was owned solely by either spouse before the marriage by gift or inheritance during the marriage as well as any property purchased with separate funds during the marriage. No signature from the other spouse is needed when mortgaging or conveying the property.
Trust
device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
Trustor- creates the trust
Beneficiary- The who benefits from the trust
Trustee- fiduciary, holds legal title carry out the trusters wishes
Living trust and testamentary trust.
Land Trust
Real estate is the only asset. Beneficiary is usually also the truster. Often created for conservation of farmland, costal land, and scenic vistas. Loan with no recorded mortgage Additional probate costs and inheritance taxes can be avoided.
Partnership
An association of two or more people who carry on a business for a profit as co owners. In PA it is not a legal entity and technically cannot own real estate. individual partners must hold title as tenants in common or joint tenants.
General Partnership
All partners participate to some extent in the operation and movement of business and share full personal liability for business losses and obligations
Limited Partnership
consist of one or more general partners and limited partners. Limited partners are not legally permitted to participate in the business and each can be held liable for business losses only to the amount invested.
Uniform Partnership Act
partnership is recognized as a legal entity and can hold title in the partnerships name.
Corporation
An artificial person created under the laws the state from which it receives its charter. Manged and operated by a board of directors. Can own real estate in severalty or as a tenant in common. Continues to exist until it is formally dissolved. They get double taxation on profit.
S Corporation
100 or fewer shareholders offers small businesses many of the benefits of a corporation but avoids double taxation.
Limites Liability Corporation (LLC)
Combines attractive features of a limited partnerships and corporations. Enjoy limited liability offered by corporate form of ownership and tax advantages of a limited partnership. Flexible management structures without the complicated requirements of corporations or the restrictions of limited partnerships.
Condominium Ownership
Owners have free simple title to the unit and share title to common areas. Governed by the declaration of condominium and elected boards of directors (HOA). Should examine association fees, assessment fees, and rules before getting one. If a fee is missed then the debt becomes a lien against the unit
- 15 days before a sales contract they must get a public offering statement
- If newly converted they have a two year warranty against structural defects and common elements. They must also get a report
- Succeeding purchasers must be given a copy of the condominium declaration
Pennsylvania Uniform Condominium Act
It is created and established when the owner of an existing building or the developer of unimproved property executes and records a declaration of condominium. Requires protective purchasers be provided with enough info about the operation of the condominium association including fees, covenants and restrictions that will affect their ownership
Cooperative Ownership
Corporation holds title to the land and the building. They offer shares of stock to prospective tenants. Tenant owners. They have proprietary leases. The cooperative tenant owners do not own real estate instead they own interest in a corporation that only has one asset; the building. Governed by bylaws of the corporation and elected board of directors or trustees. Default on payment will burden the remaining shareholders.
Time share ownership/ time share use
Multiple purchasers buy interests in real estate. Each purchaser has the right to use the property for a set time each year. It is fee simple interest ownership. Time share use agreement is personal property that expires after a specified time period. It is governed by a developer.
