Interests In Real Estate

Question 1

Interests

Answer 1

estates or tenancies. the extent of someone’s claim to real estate.

Question 2

Freehold Interest

Answer 2

ownership

Question 3

Non-freehold Interest

Answer 3

possessory rights that don’t include ownership (rental)

Question 4

Fee Simple Absolute (fee, fee simple, fee simple indefeasible)

Answer 4

default type of ownership. inheritable and not restricted to any bundle of rights.

only limited by public and private restrictions (zoning, building codes)

Question 5

Fee Simple Defeasible

Answer 5

limited ownership in real estate and can be lost if limit is violated or condition is triggered

Question 6

Fee Simple Determinable

Answer 6

Fee Simple Defeasible - automatically lost when limit is violated

Question 7

Fee Simple Subject to a Condition Subsequent

Answer 7

Fee Simple Defeasible - lost when legal action brought pursuant to violation of limit and return property to original grantor

Question 8

Fee Simple Subject to an Executory Limitation

Answer 8

Fee Simple Defeasible - similar to condition subsequent but expect property would be transferred to third party named by grantor

Question 9

Life Estates

Answer 9

exist as long as owner/life tenant of property is alive

Question 10

habdem clause

Answer 10

section in life tenant’s deed that states who the ownership transfers to (usually remainder man) when life tenant passes

Question 11

Remainderman

Answer 11

a person who inherits or is entitled to inherit property upon the termination of the estate of the former owner

Question 12

Life Estate in Reversion

Answer 12

life tenant dies, legal title transfers back to original grantor

Question 13

Life Estate in Remainder

Answer 13

life tenant dies, legal title transfers to some third party named by original grantor

Question 14

Pur Autrie Vie

Answer 14

not based on life tenant’s term of life but on some arbitrary third party’s life as named by original grantor

Question 15

Legal Life Estates

Answer 15

life estate created by law.

Question 16

Dower’s Rights

Answer 16

surviving husband or wife is granted life estate for real property that was not willed to them, but owned by spouse at spouse’s time of death. This is inactive until death.

some states it’s up to 1/3 of deceased spouses real estate

Question 17

Inchoate

Answer 17

inactive

Question 18

Homestead

Answer 18

life estate granted to owners of family home. protection from forced sale of home to satisfy debts up to a certain amount. can only do one at a time.

Question 19

Present Interest

Answer 19

life estate tenant owns this until death

Question 20

Future Interest

Answer 20

Remainderman or grantor in reversion interest hold this

Question 21

Life Tenant

Answer 21

who owns ownership rights in the present moment. they cannot commit waste because it would compromise the future interest. can use entire bundle of rights minus devise.

they can rent/sell but when the owner passes, the rights go to the future interest which isn’t ideal

Question 22

Severalty

Answer 22

ownership held by one person.

Question 23

Co-Ownership

Answer 23

ownership shared by two or more persons

Question 24

Tenancy in Common

Answer 24

co-ownership default. purchase without specifying interests in dividing. could be equal or unequal. cannot be compromised and is inheritable

Question 25

Joint Tenancy

Answer 25

- co-ownership must be chosen by all persons and noted in deed. - follows survivorship - not inheritable - if part of it is sold, it is removed from joint - can be completely terminated by voluntary action, court order, or death of all tenants. - if 3/4 die, it becomes severalty

Question 26

Unity of Possession

Answer 26

4 unities - all have equal rights of possession

Question 27

Unity of Interest

Answer 27

4 unities - all have equal interests in property

Question 28

Unity of Time

Answer 28

4 unities - all purchase property at same time

Question 29

Survivorship

Answer 29

if one co-owner dies, their interest is divided amongst the remaining parties evenly

Question 30

Unity of Title

Answer 30

4 unities - all acquire in the same deed

Question 31

Tenancy in Entirety

Answer 31

joint tenancy for married couples. includes creditor protections. limitation on forced sale to satisfy debts of only one spouse if divorce, turns back to tenancy in common

Question 32

Separate Property States

Answer 32

Entirety - my sell or devise separately, similar to joint tenants

Question 33

Community Property States

Answer 33

Entirety - property acquired during marriage cannot be sold or devised without consent of both spouses even if only one bought it

Question 34

Condominiums

Answer 34

subdivided building into units, tenants in common.

Question 35

Master Deed

Answer 35

how the condo building and its home owners association will be set up

Question 36

Declaration of Trusts

Answer 36

sets up Board of Trustees to manage condo association

Question 37

Bylaws

Answer 37

rules of the building

Question 38

Condo Conversion

Answer 38

a building that turns into condos

Question 39

Condo Fees

Answer 39

monthly fees to maintain common areas and upkeep. If failed to pay, may risk foreclosure

Question 40

Super-Priority Lien

Answer 40

Lien implemented by the association is dues are not paid. For up to 6 months of unpaid fees to unit. run with land, responsibility is on unit not unit owner. binding on prop owner

Question 41

Special Assessments

Answer 41

(watch out for) extra condo fees charged to repair or upgrade building

Question 42

Capital Reserve

Answer 42

(watch out for) money held in a reserve fund account by condo associations and investors to pay for improvements to property

Question 43

Cooperatives

Answer 43

Cooperative formed for limited purpose in apartment buildings. LLC provides housing to shareholders. people who live their own stock or shares on company, gives right to proprietary lease to their unit. Own company not unit

Question 44

Co-Op Board

Answer 44

board of trustees. owners pay coop fees. Bank will accept stock as collateral for loan

Question 45

Why are Co-Ops Created..

Answer 45

to permit their residents to limit unit ownership in a legally permissible way since co-op approves sale of shares. Allows for housing for specific types of people. must be legal and comply with FHAs

Question 46

Trusts

Answer 46

Created during persons life or upon death. Trustor grants access to trustee who cares for trust's assets on behalf of beneficiaries

Question 47

Trustor

Answer 47

Creates trust

Question 48

Beneficiaries

Answer 48

Who receives money from trust

Question 49

Land Trusts

Answer 49

trusts that only own real estate and don't include other assets typically last for some limited period of time (ex; 25 years)

Question 50

Timeshares (interval ownership, prepaid vacations, floating use period)

Answer 50

dividing time rather than space. owns a specific part of the year along with shared interest in common areas. Owner pays maintenance fees for upkeep year round

Question 51

Securities

Answer 51

investments (stocks or bonds)

Question 52

Syndications

Answer 52

Securities -