Real Estate (Chapter 3) Ownership

Question 1

What is a Freehold Estates - Estates of inheritance? What are the three main categories that they fall into?

Answer 1

Freehold Estates - Estates of inheritance is owners have the right to determine who inherits the estate. Three types of estates of inheritance exist: fee simple, defeasible fee, and life estate.

Question 2

What is a fee simple estate?

Answer 2

conveys all the rights of ownership possible, including use, disposition, and inheritability. This type of ownership endures for an indefinite period of time.

Question 3

What is a Defeasible Fee (Qualified) Estate?

Answer 3

Qualified by something the new owner can or can’t do. An example might be that a seller might prohibit the deforestation of the land. If a buyer disregards this prohibition and begins deforestation, the original owner can initiate legal proceedings to retake the property.

Question 4

What is a Estate for the Life of Another? What is the French phrase that people use to express this term?

Answer 4

(pur autre vie) Estate persists for the lifetime of a person (the measuring life) who doesn’t hold the estate. This person cannot pass the estate to heirs because they don’t own the estate.

Question 5

What is the recipient of a life estate called?

Answer 5

Tennent

Question 6

What right can a Life estate Tennent not exercise?

Answer 6

Disposition - Selling the property

Question 7

What is the law that gives the tenant right right to harvest wood from the life estate property for minimum use.

Answer 7

Estovers

Question 8

What does life estate tenants pay to keep the property in possession?

Answer 8

1. Pay Taxes
2. property insurance
3. Mortgage payments
4. Maintain property so when estate ends property is passed on in a not diminished property.

Question 9

What happens when the life tenant dies?

Answer 9

1. The original owner takes the property back (known as reversion).
2. The property goes to a third party called a remainderman. When the life estate ends (on the death of the named individual), the remainderman holds title in fee simple estate. This might be in severalty (sole ownership) or concurrent ownership if there is more than one remainderman. This is often the case when a parent holds a life estate, with the children set up as remaindermen.

Question 10

What is a marital life estate?

Answer 10

There are times when a married person owns property solely in his/her own name, and the spouse doesn’t have an interest in the property. In North Carolina, when this happens, the property owner dies, and is survived by a spouse, a marital life estate arises by law. Under a North Carolina marital life estate, the surviving spouse can choose to inherit one-third of the value of whatever the deceased spouse owned during the time of the marriage, even if they didn’t own it at the time of their death, instead of what they would normally inherit.

Question 11

What is homesteading?

Answer 11

may be designated as a homestead, which is exempt from taxation, specific residency, age, and income requirements.The amount of the homestead that can be excluded is the greater of $25,000 or 50% of the appraised value of the residence.

Question 12

What are Nonfreehold or Leasehold Estates?

Answer 12

also known as less-than-freehold or leasehold estates. They provide a rental interest in a property.

Question 13

What is an estate for a fixed period of time that is a leasehold estate?

Answer 13

Estate for years

Question 14

An estate set up for periodic tenancy that automatically renews at the end of each period.

Answer 14

Estate from year to year

Question 15

A Leashold estate that either party may terminate at any time.

Answer 15

Estate at will

Question 16

A Leasehold Estate situation in which tenants fail to vacate the property at the end of their lease.

Answer 16

Estate at sufferance

Question 17

What is Tenancy in common?

Answer 17

Two or more people are owners with undivided interest in the whole property. Fractional interest can be uneven. If not specified by people buying property then it defaults to tenancy in common. Any income made from the property would be divided according to each owner’s interest share. Similarly, each co-owner is proportionally responsible for property taxes, upkeep, and other costs.

Question 18

Is there any restrictions on transferring interests in a tenancy in common ownership?

Answer 18

No, but if the party was trying to transfer the whole property then you would need both of the tenants to sign off on the transfer.

Question 19

Does tenancy in common have the right of ingeritance?

Answer 19

Yes a percentage of the ownership can be passed to heirs.

Question 20

What is joint tenancy?

Answer 20

An equal, undivided interest between the co-owners. In North Carolina it must be intentionally created with the title. Also, it can only be created if conditions called the four unities are present

Question 21

What are the four unities of joint tenancy?

Answer 21

1. Possession: Each owner will enjoy undivided possession of the property.
2. Interest: Customarily, ownership is divided equally among the owners. However, North Carolina is one state that allows unequal ownership interest as long as it is clearly stated in the title.
3. Time: Ownership interest is acquired at the same moment. New owners cannot be added at a later time unless a new joint tenancy is created.
4. Title: Each of the joint tenants acquires title to the property from the same source (i.e., a deed).