Chapter 3 - Unit 3 Flashcards
1
Q
In interest in real estate is
A
Ownership of any combination of the bundle of rights to real property
2
Q
What are the 5 rights to real property:
A
- Possess
- Use
- Transfer
- Encumber
- Exclude
3
Q
An undivided interest is an owner’s interest in a property in which ____________.
The terms “undivided” or “indivisible” signify that the owner’s interest is in a ______ part of the entire estate, not in a ______ portion of the real property itself.
A
Two or more parties share ownership.
fractional….
not physical
4
Q
Interests are principally distinguished by whether they include ________.
A
possession
5
Q
If the interest-holder enjoys the right of possession, the party is considered to have _________ or ________.
A
an estate in land or an estate
6
Q
If a private interest-holder does not have the right to possess, the interest is __________.
A
encumbrance
7
Q
If the interest-holder is not private, such as a government entity, and does not have the right to possess, the interest is some form of _________.
A
public interest
8
Q
An encumbrance enables a non-owning party to ________.
A
restrict the owner’s bundle of rights
9
Q
Government rights to property, since they are in the public interest, ________________.
A
supersede the rights of the individual.
10
Q
The prime example of public interest is _________ or the right of the local or county government to _________.
A
police power
zone
11
Q
Other examples of public interest include the right to acquire ownership through the power of _________ eminent domain and ownership claimed by _________.
A
eminent domain
escheat
12
Q
___________ is the right of the government to take private property for a necessary public use, with just compensation paid to the owner.
A
Eminent domain
13
Q
Eminent domain is limited by 3 requirements:
A
- The property owner must be paid compensation for the property.
- The property must be used for the public good.
- The owner must have due process in the court systems.
14
Q
When the owner and the government cannot negotiate a satisfactory voluntary acquisition of the property, the government can institute the process of ________ to take a property by eminent domain. When this happens, the process is called a “________.”
A
condemnation
taking
15
Q
Since property cannot be without an owner, if an owner dies without a will and without heirs, or if the property is abandoned, the property reverts to the state. This process is _______.
A
Escheat
16
Q
In a _______, the duration of the owner’s rights cannot be determined: the rights may endure for a lifetime, for less than a lifetime, or for generations beyond the owner’s lifetime.
A
freehold estate
17
Q
A _______ is distinguished by its specific duration, as represented by the least term.
A
leasehold estate
18
Q
Ownership of a freehold estate is commonly equated with ___________, whereas leasehold estate is not.
A
ownership of the property
19
Q
Both leasehold and freehold estates are referred to as _________.
A
tenancies
20
Q
The owner of the freehold estate is the _______, and the renter, or lessee is the ________.
A
freehold tenant
leasehold tenant
21
Q
Summary
Define “undivided interest” in real estate
A
When 2 or more owners share ownership, the interest of an individual owner is undivided and indivisible in the sense that it pertains to a fractional part of the entire estate, not to a physical portion of the real property.
22
Q
Summary:
Discuss how the right of possession determines what kind of estate or interest a party has in real estate.
A
If the interest-holder enjoys the right of possession, the estate is an estate in land. If the interest-holder does not have the right of possession, the interest is an encumbrance in the case of private interest-holder, or some form of public interest in the case of a non-private interest holder.
23
Q
Summary
What primarily distinguishes freehold estates from leasehold estates?
A
The length of time the holder may enjoy the right to possess the estate, the relationship of parties owning the estate, and specific interests held in the estate.
24
Q
Freehold estates differ primarily according to the _____________, and ___________.
A
duration of the estate and
what happens when the owner dies.
25
A freehold estate of potentially unlimited duration is a ________________.
fee simple estate
26
An estate limited to the life of the owner is a __________.
life estate
27
What is the highest form of ownership interest one can acquire in real estate?
The fee simple freehold estate
28
The fee simple estate includes
the complete bundle of rights, and the tenancy is unlimited, with certain exceptions.
29
The fee simple interest is also called the _______ or simply, __________
fee interest
| the fee
30
The owner of the fee simple interest is called the ________.
fee tenant
31
There are two forms of fee simple estate: ______ and ______.
absolute and defeasible
32
The most desirable estate that can be obtained in residential real estate. It is also the most common.
The fee simple absolute estate
33
The fee simple absolute estate is a perpetual estate that is ___________________.
not conditioned by stipulated or restricted uses.
34
The 6 bundle of rights attached to the fee simple absolute estate:
1. Right of quiet enjoyment
2. Right to give away
3. Right to sell by deed
4. Right to will
5. Right to exclude
6. Right to control within what is allowed by law
35
A fee simple owner may also do any of the following (5)
1. Pass a life estate in reversion or remainder to another person
2. Use the property as security for a debt
3. Grant an easement
4. Allow another person to lease the property
5. Give permission for another to conduct an activity on the property.
36
Some deeds create what starts out as a fee simple, but attach some sort of condition or limitation. These are called _____________ (or conditional) estates
fee simple defeasible
37
In defeasible estates, ownership can continue indefinitely, provided the _____________________.
Essential characteristics include (2):
use of the property conforms to certain stated conditions
1. The property must be used for a certain purpose, or under certain conditions
2. If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.
38
The two types of fee simple defeasible are:
1. determinable
| 2. condition subsequent
39
The deed to the determinable estate state __________.
usage limitation
40
In condition subsequent, if any condition is violated, the previous owner may repossess the property. However, the reversion of the estate is not ___________, the grantor must ______________
automatic
re-take physical possession within a certain time frame.
41
A _______ is a freehold estate that is limited in duration to the life of the owner or other named person.
life estate
42
Upon the death of the owner or other named individual, the estate passes to
the original owner or other named party
43
The owner of a life estate is called the _______
life tenant
44
The life tenant does not have the right to __________.
pass ownership to his or her heirs
45
The 3 distinguishing characteristics of the life estate are:
1. The owner enjoys full ownership rights during the estate period.
2. Holders of the future interest own either a reversionary or a remainder interest.
3. The estate may be created by agreement between private parties, or it may be created by law under prescribed circumstances.
46
If a life estate names a third party to receive title to the property upon termination of the life estate, the party enjoys a future interest, called a _________ or a _______.
remainder interest or a remainder estate.
47
Those who hold a remainder interest are called a
remainderman
48
If no remainder estate is established, the estate reverts to the original owner or the owner's heirs. The original owner holds a __________
reversionary interest
49
The two types of conventional life estates are the ______ and the __________ life estates.
ordinary
| pur autre vie
50
An _______ life estate ends with the death of the life estate owner and may pass back to the original owners or their heirs (___B____) or to a named third party (___C___).
A. ordinary life estate
B. reversion
C. remainder
51
A ___A_____ life estate endures over the lifetime of a third person, after which the property passes from the tenant holder to the original grantor (__B___) or a third party (___C___)
A. Pur Autre Vie
B. Reversion
C. Remainderman
52
A _________ is created by state law, as opposed to, being created by a property owner's agreement.
What is the focus
legal life estate
Defining and protecting the property rights of surviving family members upon the death of the spouse
53
Also known as _______, a legal life estate makes it impossible for one partner to sell the property without the consent of the other partner, or to own property in one name only.
marital rights
54
The 3 major forms of legal life estate are the:
1. homestead
2. dower and curtesy
3. elective share
55
A ______ is one's principal residence.
homestead
56
Homestead laws protect family members against _________________.
losing their homes to general creditors attempting to collect on debts.
57
Homestead laws generally provide that:
1. All or portions of one's homestead _________ from a forced sale executed for the collection of general debts.
2. Tax debts, seller financing debts, debts for home improvement, and mortgage debt are _________.
3. The family must ______ the homestead.
4. The homestead interest ___________ by just one spouse.
5. The homestead exemption and restrictions endure _____________.
6. Homestead interests in a property are ______ if the property is sold or abandoned.
1. are exempt
2. not exempt
3. occupy
4. cannot be conveyed by one spouse
5. over the life of the head of the household
6. extinguished
58
The homestead exemption from certain debts should not be confused with the
homestead tax exemption, which exempts a portion of the property's value from taxation
59
A _____ is a wife's life estate interest in the husband's property. When the husband dies, the wife can make a claim to portions of the decedent's property.
dower
60
A _____ is the husband's life estate interest in the wife's property.
Curtesy
61
Property acquired under dower laws is owned by the surviving spouse for _____________
the duration of his or her lifetime
62
To transfer property within dower and curtesy states, the husband or wife must obtain _________________ in order to convey clear title to another party. If ____________, the dower right is automatically extinguished.
a release of the dower interest from the other spouse
both parties sign the conveyance
63
__________ is a state-level statute enabling a surviving spouse to make a minimum claim to the deceased spouse's real and personal property in place of the provisions for such property in the decedent's will.
Elective share
64
Elective share laws generally provide that:
1. The surviving spouse is ___________________, excepting homestead property and property the decedent owned exclusively.
2.
1. entitled to a percent of the deceased spouse's property.
2.
65
Elective share laws generally provide that:
1. The surviving spouse is ___________________, excepting homestead property and property the decedent owned exclusively.
2. The surviving spouse must file for the elective share within __________.
3. If the spouse fails to file, the estate passes on _________, or the state's _______
4. The elective share right pertains only to _________ and is not _________.
1. entitled to a percent of the deceased spouse's property.
2. a limited time period
3. according to the will or the state's law of descent
4. he surviving spouse and is not transferable.
66
________ is a form of ownership that distinguishes property into categories of separate and community.
Community property
67
Owned by one party =
separate
68
Owned equally by both parties
community
69
Community property requires the consent of both parties to _______ or _______.
transfer or encumber
70
On the death of an owner, the laws of ________ treat separate and community property differently. (will go into that later)
laws of descent
71
________ constitutes true ownership of the property for the owner's life.
That means that the life tenant can ____A______, __B____ it, and receive any ________C__________.
life tenancy
A. Use and enjoy
B. lease
C. income and profits that the property generates
72
In theory, a life tenant could sell the property, mortgage it, or even give it away, but title would always end ____________ - no matter who was in possession of the property at that time.
at the time of the life tenant's death
73
But a life tenant has the responsibility to __A_______ for the ___B____ or the __C____ interest.
A. protect the property
B. remainderman
C. revisionary
74
If the life tenant damages or misuses the property, it is known as an _________. This would include:
1. Using the property for _____________
2. Causing a ____________
3. Neglecting to _________
4. Conducting activities that would ___________
act of waste
1. something other than was intended
2. fire that destroys the home
3. pay property taxes
4. decrease the value of the property
75
Summary of Freehold Estates
A. ___________
1. Absolute
2. Defeasible
a. Determinable
b. condition subsequent
B. ____________ (reversionary or remainder)
1. Conventional
a. ordinary
b. pur autre vie
2. Legal
a. homestead
b. dower and curtesy
c. elective share/community share
A. Fee Simple
B. Life
76
Summary
What is the highest form of ownership interest one can acquire in real estate and why?
Fee simple real estate. It includes the complete bundle of rights and the tenancy is unlimited.
77
Summary
What are the essential characteristics of fee simple defeasible estates?
The property must be used for a certain purpose or under certain conditions. If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.
78
Summary
How is a life estate different from a fee simple estate?
A life estate is limited in duration to the life of the owner or other named person. When the life tenant dies, the estate passes to the original owner or another named party. The life tenant does not have the right to pass ownership to his or her heirs.
79
A ________ or ______ arises from the execution of a lease by a fee owner - the _____ or _____ to a ______ or ________.
leasehold estate or leasehold
lesser or landlord
lessee or tenant
80
Since tenants do not own the fee interest, a leashold estate is technically an item of __________ for the tenant.
personal property
81
Leasehold tenants are entitled to ______________ the leased premises during the lease term in the manner prescribed in the lease. They also have restricted rights to ________.
possess and use
restriction
82
Leasehold estates are sometimes referred to as _____________.
less than freehold estates
83
The 4 main types of leasehold estates are distinguished mainly by _______________.
the period of time for which the owner's rights are temporarily transferred.
84
The 4 main types of leasehold estates are:
1. Estate for Years
2. Estate from Period to Period
3. Estate at Will
4. Estate at Sufferance
85
The ________ is a leasehold estate for a definite period of time, with a beginning date and an ending date. It may endure for any length of term. At the end of the term, the estate _________.
estate for years
automatically terminates
86
Estate for years summary of features:
1.
2.
3.
1. Has a definite beginning and ending date
2. Does not require notice to terminate at the end of the term.
3. Renewal is NOT automatic
87
In an _______________, also called a ___________, the tenancy period automatically renews for an indefinite period of time, subject to timely payment of rent. At the end of the period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period.
estate from period-to-period, also called a periodic tenancy
88
Summary of features of an estate from period-to-period or periodic tenancy:
1.
2.
1. No definite ending date (renews itself for whatever period of time was agreed upon in the original lease)
2. Either party may terminate tenancy by giving proper notice to the other party.
89
The _______, also called a ________, has no definite expiration date and hence no "renewal" cycle. The landlord and tenant agree that the tenancy will have no specified termination date, provided rent is paid on time and other lease conditions are met.
estate at will, also called a tenancy at will
90
The estate at will is terminated by _______ or by ___________.
proper notice or the death of either party
91
Summary of features of the estate at will or tenancy at will:
1.
2.
3.
1. Landlord lets you stay without a lease
2. Notice can be given by either party without warning
3. Death of either party immediately terminates tenancy
92
In an __________, a tenant occupies the premises without consent of the landlord or other legal agreement with the landlord. Usually such as estate involves a tenant who fails to vacate at the expiration of the lease, continuing occupancy without any right to do so.
estate at sufferance
93
Summary of features of an estate at sufferance:
1.
2.
1. Holdover tenant is in unlawful possession of the property.
2. The landlord must evict tenant through the courts
94
A lease conveys a _________or estate that grants the tenant the following rights during the lease term.
1.
2.
3.
4.
leasehold interest
1. Exclusive possession and occupancy
2. Exclusive use
3. Quiet enjoyment
4. Profits from use
95
A lease defines the tenant's obligations, which principally are to:
1.
2.
3.
4.
1. Pay the rent on time
2. Maintain the property's condition
3. Comply with the rules and regulations of the building
4. Return the premises to the lessor at the end of the term in the condition specified by the lease
96
In conveying the leasehold estate, the landlord acquires a _________, which entails the rights to:
1.
2.
3.
leased fee estate
1. Receive rent
2. Re-possess the property following the lease term
3. Monitor the tenant's obligations to maintain the premises
97
The lease defines the landlord's obligations, which principally are to:
1.
2.
1. Provide the necessary building support and services
| 2. Maintain the condition of the property
98
The landlord may sell, assign, or mortgage the leased fee interest. However, transferring and encumbering the leased property do NOT ____________
extinguish the obligations and covenants of a lease
99
Summary:
What is the primary distinction between a freehold estate and a leasehold estate?
Duration of the owner's rights.
A leasehold is temporary, even if there is no specific term, while a freehold has an indeterminate duration.
100
Summary:
The fee simple freehold estate is called the highest form of ownership interest, even though a fee simple defeasible carries some restrictions on usage. Why are other estates less desirable?
With all other estates in land - life, leasehold - the holder of the estate cannot control what happens to the estate in the future. The life estate reverts or is remaindered; the leasehold terminates when the lease expires.
101
Which type of leasehold estate is commonly referred to as a periodic tenancy?
Estate from period to period
102
What are a tenant's primary obligations when leasing a property?
1.
2.
3.
1. Pay the rent on time
2. Maintain the property's condition
3. Comply with the rules and regulations of the building
