8. Forms of Real Estate Ownership

Question 1

COMMON ELEMENTS

Answer 1

Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all of the condominium residents. Each condominium owner has an undivided ownership interest in the common elements.

Question 2

COMMUNITY PROPERTY

Answer 2

A system of property owner ship based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage. A hold over of Spanish law found predominantly in western states; the system was unknown under English common law.

Question 3

CONDOMINIUM

Answer 3

The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners.

Question 4

COOPERATIVE

Answer 4

A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possessing a proprietary lease.

Question 5

CO-OWNERSHIP

Answer 5

Title ownership held by two or more persons.

Question 6

CORPORATION

Answer 6

An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.

Question 7

GENERAL PARTNERSHIP

Answer 7

A partnership where all partners participate in the operation and management of the business and share full liability for business losses and obligations. See also partnership.

Question 8

JOINT TENANCY

Answer 8

Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of a joint tenant, the decedent’s interest passes to the surviving joint tenant or tenants by the right of survivorship.

Question 9

JOINT VENTURE

Answer 9

The joining of two or more people to conduct a specific business enterprise. A joint venture is similar to a partnership in that it must be created by agreement between the par ties to share in the losses and profits of the venture. It is unlike a partnership in that the venture is for one specific project only, rather than for a continuing business relationship.

Question 10

LIMITED LIABILITY COMPANY (LLC)

Answer 10

Combines the most attractive features of limited partnerships and corporations. Members of an LLC enjoy the limited liability offered by a corporate form of ownership and the tax advantages of a partnership. Also offers flexible management structures without complicated requirements of S corporations or the restrictions of limited partnerships.

Question 11

LIMITED PARTNERSHIP

Answer 11

Consists of one or more general partners as well as limited partners. The limited partners are not legally permitted to participate and each can be held liable for business losses only to the extent of his or her investment. See partnership.

Question 12

PARTITION

Answer 12

The division of cotenants’ interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures.

Question 13

PARTNERSHIP

Answer 13

An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than as a single entity. A general partnership is a typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation. A limited partnership is a business arrangement whereby the operation is administered by one or more general partners and funded, by and large, by limited or silent partners, who are by law responsible for losses only to the extent of their investments.

Question 14

RIGHT OF SURVIVORSHIP

Answer 14

Upon death of a joint tenant, his or her interest does not pass to heirs or according to a will. Rather, the entire ownership remains in the surviving joint tenant(s). See also joint tenancy.

Question 15

SEPARATE PROPERTY

Answer 15

Under community property law, property owned solely by either spouse before the marriage, acquired by gift or inheritance after the marriage, or purchased with separate funds after the marriage.

Question 16

SEVERALTY

Answer 16

Ownership of real property by one per son only, also called sole ownership.

Question 17

SYNDICATE

Answer 17

A combination of people or firms formed to accomplish a business venture of mutual interest by pooling resources. In a real estate investment syndicate, the parties own and/or develop property, with the main profit generally arising from the sale of the property.

Question 18

TENANCY BY THE ENTIRETY

Answer 18

The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. Upon the death of one spouse the survivor becomes the owner of the property.

Question 19

TENANCY IN COMMON

Answer 19

A form of co-ownership by which each owner holds an undivided interest in real property as if he or she were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have right of inheritance.

Question 20

TIME-SHARE

Answer 20

A form of ownership interest that may include an estate interest in property and that allows use of the property for a fixed or variable time period.

Question 21

TRUST

Answer 21

A fiduciary arrangement whereby property is conveyed to a person or institution, called a trustee, to be held and administered on behalf of another person, called a beneficiary. The one who conveys the trust is called the trustor.