Chapter 11 - How Home Ownership is Held Flashcards
Chapter 11 Objectives
1) Identify at least three forms of ownership in real property, and provide at least one example of each.
2) Identify at least two forms of co-ownership in real property, and provide at least one example of each.
3) Define a trust.
4) Identify at least three types of business entities that may own real property.
Severalty Ownership
Owned by one person only. Sole ownership.
sever = individually
“jointly and severalty” means jointly and individually
Tenancy in Common
An ownership of realty by two or more persons, each of whom has an undivided interest, without the “right of survivorship”.
(a) undivided interest (unity of possession) but can specify % of who owns it in deed; (b) undivided fractional interest in severalty and can convey that interest w/o consent of the others. On the death of co-tenant the undivided interest passes to the heirs according to the will
Three Types of Co-Ownership:
title is held by two or more parties, or two legal entities
Three types:
1) Tenancy in Common
2) Joint Tenancy
3) Community Property
Trust Ownership
title is held by a third person for the benefit of another
Ownership for Married Couples
can hold title under community property laws
Joint Tenancy
Two or more natural persons own that comes with a special benefit called the right of survivorship.
Undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship, i.e., the right to share equally with other surviving joint tenants in the interest of a deceased joint tenant.
surviving party receives the ownership of the deceased joint tenant. The final tenant will take ownership in severalty. Can a
Must be created by a signed written agreement with the intention to create this (TO A&B as joint tenants and to the survivor of them)
Right of Survivorship
The right of a surviving tenant or tenants to succeed to the entire interest of the deceased tenant; the distinguishing feature of a joint tenancy.
Community Property
Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse had equal rights of management, alienation, and testamentary disposition of community property.
Separate property is either owned solely by husband or wife before the marriage occurred, or acquired by gift/inheritance after the marriage. The non-purchasing spouse must sign off on this if the other was to acquire an additional property.
Income earned on separate property is considered community property (just the rents collected)
Both spouses are jointly and severally liable for all community debts (unlike joint tenancy when each is liable for their own proportion of interest)
Partition
A division of real or personal property or the proceeds therefrom among co-owners. (Legal way to terminate co-ownership)
Four Unities to Create a Joint Tenancy:
1) Unity of Time
2) Unity of Title
3) Unity of Interest
4) Unity of Possession
destroyed when either one of these is terminated or operation of law, or partition suite
Trusts
A legal device whereby one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
Ex: grandparent ensures kid can go to college so they transfer an oilfield into a trust to kid (instructs kids mother to run the oilfield to pay for kids tuitions) The kid is the beneficiary, the mother is the trustee
- can be created by agreement during lifetime (Living/Inter vivo trust)
- or can be stablished by will after some ones death (Testamentary)
Beneficiary
one entitled to the benefit of a trust.
Living Trust
An agreement where the trustee holds legal possession of a fund or assets that belong to another person, the beneficiary, and it is created while the person is alive.
Trustee
a fiduciary who acts responsibility for the management of the property for the benefit of the beneficiary (individual, corporation, or any other legal entity)
