Ownership Of Real Property

Question 1

What does ownership in severalty mean?

Answer 1

One person or a single business entity owns the property, with all other interests severed

This is sole ownership of a property.

Question 2

What is a major advantage of an estate in severalty?

Answer 2

Flexibility in decision-making and document signing

One owner means one signature on documents.

Question 3

What happens to property owned in severalty upon the owner’s death?

Answer 3

The property transfers to the owner’s heirs according to a will or state law.

Question 4

What are the forms of co-ownership?

Answer 4

Tenancy in common, joint tenancy, tenancy by the entirety.

Question 5

What is unique about tenants in common?

Answer 5

Each co-owner has an undivided interest in the whole property

This is known as unity of possession.

Question 6

How is income from property divided among tenants in common?

Answer 6

According to each owner’s interest share.

Question 7

True or False: Tenants in common have a right of survivorship.

Answer 7

False.

Question 8

What is required for joint tenancy to be created?

Answer 8

The four unities: possession, interest, time, title.

Question 9

What happens when a joint tenant sells their ownership interest?

Answer 9

The buyer becomes a tenant in common.

Question 10

What is the right of survivorship in joint tenancy?

Answer 10

Property conveys to a surviving joint tenant without going through probate.

Question 11

In North Carolina, what is necessary for survivorship to be automatic in joint tenancy?

Answer 11

Exact wording in the title is required.

Question 12

What is tenancy by the entirety?

Answer 12

A form of co-ownership for married couples that includes a fifth unity, unity of person.

Question 13

What happens to tenancy by the entirety upon divorce?

Answer 13

Both parties become tenants in common.

Question 14

True or False: Tenants by the entirety can convey a fractional interest in the property.

Answer 14

False.

Question 15

What is required to terminate a joint tenancy?

Answer 15

Agreement among joint tenants and a deed reflecting the change.

Question 16

What is partitioning in co-ownership?

Answer 16

A legal action to split property so each co-owner can own a part proportionate to their interest.

Question 17

What is a restrictive covenant?

Answer 17

A rule that limits property owners’ rights for the benefit of the community.

Question 18

What is condominium ownership?

Answer 18

Ownership of a unit within a structure, with shared ownership of common elements.

Question 19

What does the North Carolina Condominium Act require from developers?

Answer 19

Prepare a declaration that includes property descriptions, governance, and restrictions.

Question 20

What is the seven-day right of rescission?

Answer 20

Buyers can cancel the purchase contract within seven calendar days without penalty.

Question 21

What is a resale certificate in the context of condominiums?

Answer 21

A document that details expenses and fees for pre-owned condo units.

Question 22

How do townhome ownership and condo ownership differ?

Answer 22

Townhome owners own the structure and land, while condo owners own only the unit and share common areas.

Question 23

What type of ownership do cooperative residents have?

Answer 23

Shareholders own shares in a corporation, not real estate.

Question 24

What is a proprietary lease in a cooperative?

Answer 24

A lease from the corporation granting unit owners the right to use their units.

Question 25

What is a timeshare?

Answer 25

A property with multiple shared ownership or use, often in a condominium-style format.

Question 26

Fill in the blank: A timeshare interest may be _______ or deeded ownership.

Answer 26

leasehold

Question 27

What is a timeshare property?

Answer 27

A timeshare property is one with multiple shared ownership or use of real estate, typically consisting of condominium-style units with amenities.

Question 28

What types of ownership can a timeshare interest have?

Answer 28

A timeshare interest may be leasehold or deeded ownership.

Question 29

What is a deeded timeshare estate?

Answer 29

A deeded timeshare estate is fee simple ownership, conveying all rights of ownership to multiple unrelated individuals.

Answer 30

.

Question 31

What does a leasehold right-to-use timeshare convey?

Answer 31

It conveys the right to occupy the property for one or two weeks a year without ownership.

Question 32

What percentage of the timeshare market is fee simple?

Answer 32

70% fee simple and 30% right-to-use.

Question 33

What are the three parties involved in a trust?

Answer 33

* Trustor * Trustee * Beneficiary

Question 34

What is one major advantage of holding property in a trust?

Answer 34

Avoids probate.

Question 35

What is a living trust?

Answer 35

A living trust is created during a person’s lifetime to manage property for beneficiaries, often minor children.

Question 36

How does a testamentary trust differ from a living trust?

Answer 36

A testamentary trust is created according to a deceased person's will and does not avoid probate.

Question 37

What is a land trust?

Answer 37

A land trust is formed specifically to hold real estate, with real property as the only asset.

Question 38

What is the primary goal of a community land trust?

Answer 38

To ensure property is available for affordable housing.

Question 39

What is the purpose of a conservation land trust?

Answer 39

To preserve land for conservation purposes, such as protecting habitats and ensuring land for designated uses.

Question 40

What is one benefit of a real estate land trust?

Answer 40

Provides privacy by keeping the identity of the property owner confidential.

Question 41

What does a land trust allow regarding ownership succession?

Answer 41

It allows the trustor to designate a contingent beneficiary to receive title upon their death.

Question 42

What is a due-on-sale clause?

Answer 42

A clause that stipulates the lender can call the entire mortgage balance due if the title to the property is transferred.

Question 43

What act allows placing real estate in a trust without triggering the due-on-sale clause?

Answer 43

The Garn St. Germain Act of 1982.

Question 44

Fill in the blank: A land trust is a _______ trust.

Answer 44

revocable

Question 45

What is one reason investors may use land trusts?

Answer 45

To prevent a bank from accelerating the mortgage note when transferring property into an LLC.

Question 46

What should property owners ensure when creating a land trust?

Answer 46

That the trust is created specifically for their state and possibly seek legal help.