Chapter 3

Question 1

Beneficiary

Answer 1

One for whom title is held under a trust and is entitled to receive income from the trust.

Question 2

Broker

Answer 2

An individual or legal entity (corporation or partnership) licensed to act as the agent of another in buying, selling, exchanging, renting, leasing, managing, or auctioning real estate for another.

Question 3

C, C & R’s

Answer 3

Covenants, conditions and restrictions which regulate the use of property held under condominium ownership and other subdivisions.

Question 4

Common Elements

Answer 4

Those areas in a condominium that each unit owner has the right to use in common with the other owners. Examples include land, buildings, recreational and parking areas, and other improvements.

Question 5

Community Property

Answer 5

A type of concurrent ownership between husband and wife which entitles each spouse to one-half of all property acquired by their mutual efforts during marriage.

Question 6

Concurrent Ownership

Answer 6

A form of ownership where more than one person has an interest in the same property at the same time.

Question 7

Condominium

Answer 7

A form of concurrent ownership in which each occupant of a multiple unit building holds fee simple title to an individual unit. Common areas like land and recreational facilities are co-owned by the unit owners as tenants in common.

Question 8

Cooperative

Answer 8

A form of concurrent ownership of a multiple unit building in which a corporation holds title to the land and improvements. Each unit owner buys stock in the corporation for the exclusive right to use a particular unit for the life of the corporation. The unit owner is assured of this right through a proprietary lease.

Question 9

Co-owner

Answer 9

One who owns an interest in property simultaneously with another. Also known as co-tenant.

Question 10

Co-ownership

Answer 10

Also known as Concurrent Ownership

Question 11

Co-tenant

Answer 11

Also known as Concurrent Owner

Question 12

General Partnership

Answer 12

A type of partnership which allows each partner to participate in the management of the business but holds the partners jointly and personally liable for obligations incurred by the partnership.

Question 13

Joint Tenancy

Answer 13

A form of concurrent ownership involving only one title that is shared equally by the co-owners. Upon the death of a co-owner, the defendant’s interest passes usually to the remaining co-owners

Question 14

Joint Tenant

Answer 14

One who co-owns property in joint tenancy

Question 15

Joint Venture

Answer 15

A partnership formed for the purpose of carrying out a particular business project without an intent to establish a permanent business relationship.

Question 16

Land Trust

Answer 16

A trust in which the beneficiary retains control over the property held by the trustee. The trustee’s duty is simply to sign at the beneficiary’s request all documents which are necessary to convey, mortgage, or lease the property.

Question 17

Living Trust

Answer 17

A trust created by a property owner during his/her life time for the purpose of providing financial care for the family or self.

Question 18

Limited Liability Company

Answer 18

A unique form of ownership not classified as a corporation, but an association similar to that of limited partnership. Management responsibilities are vested in its members and members are not personally liable for debts of the limited liability company. Members are not stockholders and therefore, profits are not taxed at the corporate level.

Question 19

Limited Partnership

Answer 19

A partnership made up of general and limited partners. A general partner has the responsibility of managing the business of the partnership and is held liable for its obligations. Limited partners are investors who do not participate in the management and are liable only to the extent of their investments.

Question 20

Partition Suit

Answer 20

A legal action to divide or sell property held as tenancy in common or in joint tenancy. This legal procedure is available to co-tenants who are unable to mutually agree on an acceptable plan of division or sale.

Question 21

Proprietary Lease

Answer 21

A lease used with cooperative ownership to assure the tenant of the exclusive right to use a particular unit in a multiple unit building.

Question 22

Real Estate Investment Trust (REIT)

Answer 22

A trust which must be managed by a board of trustees who invest in real estate for at least one hundred beneficiaries (investors) in order to quality for certain income tax benefits.

Question 23

Right of Survivorship

Answer 23

A right which allows a deceased co-owner’s interest in property to pass to the surviving co-owners rather than to the estate of the deceased.

Question 24

Separate Property

Answer 24

In community property states, separate property is any property owned by either spouse prior to marriage, or property acquired during the marriage by gift or by inheritance.

Question 25

Severalty Ownership

Answer 25

Ownership by one person or a single legal entity

Question 26

Sole Ownership

Answer 26

Also known as Severalty Ownership

Question 27

Syndicate

Answer 27

A group of persons or firms who combine their resources for the purpose of investing or dealing in real estate.

Question 28

Tenancy by the Entirety

Answer 28

A special form of joint tenancy between husband and wife. Both own an equal undivided interest in the entire property with the right of survivorship. Any instrument to convey or transfer an interest in the property must be signed by both spouses.

Question 29

Tenancy in Common

Answer 29

A form of concurrent ownership where co-owners hold an equal or unequal undivided interest without the right of survivorship.

Question 30

Tenancy in Partnership

Answer 30

A form of concurrent ownership in which title is held by either a general or limited partnership in a registered trade name.

Question 31

Testamentary Trust

Answer 31

A trust created by will.

Question 32

Time-sharing

Answer 32

A special form of condominium ownership which allows multiple owners to use (share) the same unit but during different specified times each years.

Question 33

Trust

Answer 33

An arrangement in which title to property is held by a trustee on behalf of a beneficiary.

Question 34

Trustee

Answer 34

A person or institution which holds title to property for the benefit of another under specific instructions for the use and disposition of that property.

Question 35

Trustor

Answer 35

One who creates a trust by conveying title to a trustee.

Question 36

Undivided Interest

Answer 36

An ownership interest in the entire property as opposed to ownership of a specific portion or separate part of the property.

Question 37

Unities of Joint Tenancy

Answer 37

In order to create a joint tenancy, most states require that four events occur simultaneously. First, all joint tenants must acquire their interest at the same TIME. Second, all co-owners must share the same TITLE to the property. Next, all co-owners must share equal INTEREST. Finally, each co-owner must have the equal right of POSSESSION.