CH. 7 Forms of Real Estate Ownership Flashcards
What does “Tenancy” mean?
Having an interest in a place.
Having ownership interest in a property.
In Latin it means,” To hold.”
What is it called when someone owns real estate by themself.
“Sole ownership”
“Tenancy in severalty”
Think of “Severalty” as in to “Sever” all connections, all other interests in a property but the one owner.
What types of concurrent ownership are there?
“Tenancy in common”
“Joint Tenancy”
Definition of “Tenancy in Common”
Form of ownership in which 2 or more people own property together.
This is stated in the deed.
In some states, if it is not stated in the deed, Tenancy in common is assumed.
EX: Condominium ownership
Describe these principal features of tenancy in common:
Undivided ownership
Equal or unequal shares
Sale without permission
No right of survivorship
Undivided ownership: The land is not divided or split physically between owners, but rather by shares or interest.
Equal or unequal shares: The percentage of ownership if each party does not need to be equal. One person can have 50% and the other two could have 25% for example.
Sale without permission: Any owner can sell their share without having to receive permission to do so from other owners.
No right of survivorship: If one owner dies, they leave their shares to their heirs. The other owners do not have right to that owner’s share of the property.
What is Joint tenancy?
A form of ownership with special features for two or more people.
Describe these 4 unities that create Joint Tenancy:
Unity of interest
Unity of possession
Unity of time
Unity of title
Unity of interest: Each owner has the same interest in the property. Some states now permit unequal shares. In CA you must have equal shares.
Unity of possession: Interest is divided, but physical property is not. There is no physical division of property.
Unity of time: Joint owners all take title to property at the same time. A later owner cannot be added unless new documents are executed (Creating a new Joint Tenancy). If an owner sells their interest without this happening, the new owner becomes a tenant in common. Can sell without permission of other owners.
Unity of title: All joint tenants names are on the deed.
What is the difference in the right of survivorship between tenancy in common and joint tenancy?
In a joint tenancy, if one owner dies, the other owners take over the interest of the deceased tenant. They all split the interest equally. In tenancy in common, in this situation, the owner’s children/ spouse would receive the interest.
What two types of ownership are there for married couples?
Tenancy by the entirety
Community property
Describe Tenancy by the entirety.
Form of co ownership geared towards protecting the interests of married couples by providing a right of survivorship.
A form of joint tenancy.
Each spouse has undivided and equal interest in the property.
If one spouse dies, the interest automatically goes to surviving spouse.
One spouse cannot sell their share without doing so together.
In the event of a divorce, tenancy of the entirety becomes a tenancy in common.
Describe Community property?
All property acquired under a marriage are owned by both spouses.
Can be sold or mortgaged only by joint action of both spouses.
No right of survivorship exists. Upon death of spouse, the surviving spouse receives their half of the property while the rest can be willed.
Property acquired before marriage is called what?
Separate property
Can a third party hold real estate for the benefit of someone else?
YES
Who are the main players of an ownership in trust?
Trustor, trustee, beneficiary
What is a trustee?
The person who receives property and administers it on behalf of the beneficiary. The beneficiary
