Unit 8- Estates, Tenancies, Condominiums, Cooperatives and Time Sharing

Question 1

Land is defined as

Answer 1

The surface of earth and everything attached to it by nature including products beneath the surface, downward to the center and upward to infinity.

Question 2

Define Real Estate

Answer 2

Land and ALL HUMAN made improvements permanently attached to it

Question 3

Define Real Property

Answer 3

All the Real Estate plus the “legal bundle of rights” inherent in the ownership

Question 4

what is NOT INCLUDED as Real Property?

Answer 4

Cemetery Lots or right of Burial

Renting of Mobile Home Lot or RV lot in a Mobile home or trailer park.

Question 5

Describe the two types of SURFACE RIGHTS

Answer 5

Riparian Rights
-includes the land abutting a flowing waterway such as a river/stream

Littoral Rights
-includes land abutting tidal bodies such as oceans/seas

Question 6

The gradual UNCOVERING of land by receding water where by the newly uncovered land belongs to the landowner is called…

Answer 6

RELICTION

Question 7

Real Property is defined as…

Answer 7

Land and improvements to land

Question 8

Personal Property ( CHATTEL) is defined as…

Answer 8

Items having a limited life that are easily moveable from one place to another.

Question 9

Real property becomes personal property through this…

Answer 9

An Act of Severance.

I.e. Timber. The tree is real property until you cut it down.

Question 10

Personal property becomes real property by…

Answer 10

ATTACHMENT

I.e. Fixtures

Question 11

What is a FIXTURE?

Answer 11

Personal property that has been attached to or made part of real estate and is now considered REAL PROPERTY

I.E. A BATHTUB.

Question 12

The LEGAL test for fixtures consists of these 4 measurements:(IRMA)

Answer 12

I-intent of parties (was the intent to make that item a fixture?)
R-relationship was it buyer/seller or landlord/tenant. TENANTS
are required to leave any item they have attached to a landlord’s
property
M- method or degree of attachment. If removal of the item would
result in damage to the real property, the article is classified
as a fixture.
A- adaptation. Seeks to determine if the item was designed for or
necessary to the normal use of a specific property. If adapted or
custom built it will likely be considered a fixture
i.e. Hurricane Shutters

Question 13

The term ESTATE refers to…

Answer 13

The degree, quantity, nature, and extent of interest a person can have in REAL PROPERTY

Question 14

What are the two general groups of ESTATES?

Answer 14

FREEHOLD ESTATES
LEASEHOLD ESTATES(non-freehold estates)

Question 15

What are the characteristics of FREEHOLD ESTATES

Answer 15

They are estates of OWNERSHIP INTEREST for an indefinite period of time.

If that ownership interest is INHERITED, it is said to be owned in FEE SIMPLE.

If that ownership is MEASURED BY THE LIFETIME OF THE INDIVIDUAL, it is said to be a LIFE ESTATE.

Question 16

What are the characteristics of a FEE SIMPLE estate?( also referred to as “ fee” or “ fee simple absolute”

Answer 16

-it contains the largest bundle of legal rights

-it is ownership with complete power to use, dispose of and to
allow property to descend to heirs

• highest type of real property interest
• MOST TITLE TO PROPERTY IS HELD IN FEE SIMPLE

Question 17

What are the characteristics of a LIFE ESTATE?

Answer 17

• fewer rights than fee simple
• ownership is only for a period of the lifetime of an individual
• owner must pay taxes and property insurance
• owner must keep current any mortgages or liens to preserve the property.

Question 18

Describe the characteristics of a CONVENTIONAL life estate.

Answer 18

• it is created by the person who HOLDS TITLE in real property.
• it occurs when the GRANTOR( seller) transfers the freehold estate to an individual for a period of time measured by that persons lifetime.
• it allows for the GRANTEE (buyer) or the person receiving the estate, to have use and title during life of the holder or life of whomever interest is based in ( simply put-the OWNER of property)
• when a life estate ends, the property reverts ( estate in reversion) to the original GRANTOR( previous owner) OR goes to a third party called a REMAINDERMAN.

Question 19

What characterizes an ESTATE IN REVERSION?

Answer 19

It is when a life estate reverts back to the original owner.

I.e. John Smith transfers to Mary Smith. Mary Smith dies. Property goes back to John Smith.

.

Question 20

What characterizes a REMAINDERMAN?

Answer 20

A REMAINDERMAN owns interest in a REMAINDER ESTATE while a LIFE ESTATE exists.

• The “deed” establishing the life estate designates the remainderman.
• Remainderman acquire a FEE SIMPLE estate in severalty (only heir) or concurrent ownership (more than 1 heir- i.e. 2 children)

i.e. Sue Jones deed states she owns the property for her lifetime. Upon her death, her property transfers to her sons Matt and Adam.
Sue has a LIFE ESTATE
Matt and Adam have a REMAINDER ESTATE

Question 21

What are the SIZE restrictions on HOMESTEAD property?

Answer 21

It is restricted to 160 acres outside a city/municipality OR up to 1/2 acre located within the city

Question 22

According to FL Statute, The allowable tax exemptions for HOMESTEAD property are..

Answer 22

$25,000 base exemption for city, county and school board on properties valued from 25k-75K.
On properties valued over $75K, there is the $25,000 base exemption for city, county and school board PLUS an additional $25,000 for city and county.

Question 23

How is the TAXABLE VALUE of a home calculated

Answer 23

It is calculated by taking the ASSESSED PROPERTY VALUE and subtracting the qualifying EXEMPTIONS.

Question 24

what are the characteristics of Non-Freehold Estates or LEASEHOLD Estates?

Answer 24

• They have a KNOWN duration and DO NOT INVOLVE OWNERSHIP interest
• it is interest in real property that TENANT possesses under a LEASE. The LANDLORD possesses a REVERSION ESTATE because at lease end, the property rights revert back to them.
• it is measured in calendar time.

Question 25

What are the three types of LEASEHOLD ESTATES?

Answer 25

1-ESTATE FOR YEARS
-tenancy with a specific start and end date
- any length of time from less than a year
to a period of many years
-created by WRITTEN lease agreement
- it establishes interest in real property for
the tenant but does not convey actual title
or right of disposition

2- TENANCY AT WILL
- Lease agreement with a beginning date
but no fixed termination
i.e. week to week, month to month
- May be written or Oral (parol)
- All landlord-tenant obligations exist
- notice of termination is required
-sale of property or death of owner will
terminate tenancy

3- TENANCY AT SUFFERANCE
- tenant stays in possession of property
beyond ending date of legal tenancy
without the consent of landlord
- tenant has no ESTATE of TITLE but only
“naked possession” and is not entitled of
notice to terminate
- payment and acceptance of rent alone
MUST NOT be construed to be renewal
of lease
- if tenant “holding over” is continued with
the written consent of the lessor (landlord)
then the tenancy is a tenancy at will.

Question 26

What are the two forms of OWNERSHIP in which people hold FREEHOLD ESTATES?

Answer 26

Sole Ownership and Concurrent Ownership

Question 27

What are the Characteristics of Sole Ownership

Answer 27

Property is held by 1 owner

Question 28

What is the term synonymous with Sole Ownership?

Answer 28

SEVERALTY

when a person owns an estate in severalty, they are the sole owner. When property passes to a spouse that spouse now owns an estate in severalty as they are now the sole owner.

Question 29

What are the characteristics of concurrent ownership?

Answer 29

it is ownership of two or more persons at the same time.

Question 30

What are the 3 types of concurrent ownership?

Answer 30

1- TENANCY IN COMMON
- when two or more persons wish to share
ownership of single property. It is the
most frequently used co-ownership.
- parties involved may acquire title on same
or different deeds at the same or different
times with equal OR unequal shares of
ownership
- each owns an undivided interest in whole
property rather than a particular part of
the property.

2- JOINT TENANCY
- characterized by right of SURVIVORSHIP.
When a passing “co-owner” dies, their
share of that property goes to surviving
co-owners and not their decedents.
- can only exist when the “FOUR UNITIES”
are present.
- cannot be created unless specific
wording in the deed conveying the
property provides for survivorship
i.e. “as joint tenants with right of
survivorship”
- as joint tenants die, their shares are
divided among surviving tenants until one
owner is left. This SOLE SURVIVOR now
owns FEE SIMPLE in SEVERALTY.

3- TENANCY BY THE ENTIRETIES
- this is a tenancy between husband/wife
- the four unities of joint tenancy with right
of survivorship must exist.
- they MUST BE MARRIED to each other
at the time they take title.
- the deed does not need to state that a
tenancy by the entireties exists BUT it
should serve notice to others that such
an estate exists.
- consent of BOTH spouses is REQUIRED
before anything may be done to affect
ownership -such as mortgage, will, or sell
any portion of their spousal interest.
- when one spouse dies, the surviving
spouse now owns in FEE SIMPLE

Question 31

what are the FOUR UNITIES?

Answer 31

(PITT)
P-possession
I-interest
T-title
T-time

Question 32

may a JOINT TENANT sell their share?

Answer 32

yes, BUT…the person who buys that share cannot be a joint tenant with the other original owners. They will be a TENANT IN
COMMON and will not have any rights to property upon the death of another original joint tenant.

Question 33

May husbands and wives own property separately from the marriage and what types of property does this apply to?

Answer 33

YES.

It applies to:
 -property owned separately before the
  marriage
- property held in spouses name only
-property acquired during the marriage by
  inheritance or gift

Question 34

What is the function of the division of Florida Condominiums, Timeshares and Mobile Homes?

Answer 34

They ensure compliance with laws regulating all three ownership forms.

Question 35

What are the characteristics of a cooperative or CO-OP?

Answer 35

-it is a multi unit building owned by a
corporation
-unit owners purchase SHARES of stock in
the corporation
- the ownership of the stock ENTITLES the
owner to a PROPRIETARY LEASE
-each share holder pays a pro rata share of
the tax bill to the corporation.
- the corporation pays the tax bill to the gov’t

Question 36

describe the disclosure and cancellation period as it relates to the purchase of a residential co-op.

Answer 36

The DEVELOPER is required to include a DISCLOSURE in the sale contract which states that the BUYER may cancel contract within 15 DAYS of signing.

Question 37

what are the characteristics of Condominiums?

Answer 37

-consist of individual units and common area
-owned in FEE SIMPLE
-deed may be held by one or more persons
in any type of estate or tenancy recognized
by law.
-owners own an undivided fractional share of
the COMMON ELEMENTS (pool, tennis)

Question 38

The set of written instruments describing the condominium and the association are known as…

Answer 38

Condominium Documents.

Question 39

This describes the unit boundaries, common elements, membership and voting rights in the association, and covenants and restrictions on the use of the units and the common elements.

Answer 39

Declaration of Condominium

Question 40

Describe the BY LAWS of the Association

Answer 40

-Describe the rules and regulations
-Provides for administration of the association
including procedures for calling meetings,
and determining voting requirements
-inform prospective purchasers about restrictions of leasing the unit
-provides info on assessments and in what amount unit owners are obligated to pay.

Question 41

Describe the disclosure and cancellation period as it relates to the purchase of a condo.

Answer 41

Developer is REQUIRED to file condo docs w/
the division of FL Condominiums, Timeshares and Mobile Homes BEFORE offering units for sale.

Developers of 20 or more NEW residential units must prepare and file a prospectus which summarizes the major points detailed in condo docs.

Buyers of a NEW residential unit may cancel the contract w/in 15 CALENDAR days of signing and receipt of the condo docs.

Question 42

What is the BUYER entitled to if purchasing from a private party (re-sale)?

Answer 42

A copy of the most recent year end financial info and a copy of the governance form.

Question 43

Condominium Disclosures

Answer 43

The contract for RESALE of a residential condo unit MUST include a rider stating that the buyer acknowledges receipt of the condo docs and that they may cancel the contract within 3 BUSINESS DAYS after the date of execution and receipt of the buyer of the condo docs.

Question 44

What happens when a prospective buyer chooses to cancel the contract?

Answer 44

Broker may return the escrowed binder deposit to the purchaser WITHOUT securing sellers permission provided the broker is notified IN WRITING that the buyer is cancelling during the cancellation period.

Question 45

What characterizes Time Share Ownership

Answer 45

it is ownership for a block of time.
Deeded Interest
Fee Simple
owner can sell, rent, will or give away
right to use for specified # of years.

Question 46

Time Share Disclosures

Answer 46

Purchaser may cancel contract within 10 CALENDAR days of contract signing or receipt of the public offering statement

Question 47

What is the most important factor surrounding the Time Share Re-Sale Listing Agreement?

Answer 47

There is NO GUARANTEE your time share can be sold at any particular price or w/in any particular period of time.