Unit 4 - Forms Of Real Estate Ownership Flashcards
1
Q
Common elements
A
Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all condo residents. Each condominium owner has an undivided ownership interest in the common elements.
2
Q
Community property
A
A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during the marriage. A holdover of Spanish law found predominantly in the western US states; the system was unknown under English common law.
3
Q
Condominium
A
The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, or a separate dwelling unit in a multiunit development, plus an undivided interest in the ownership of the common elements in the building or development, which are owned jointly with the other condominium unit owners.
4
Q
Cooperative
A
A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of people living within the building who are the beneficial owners of the trust or shareholders of the corporation, each possessing a propriety lease to a property unit.
5
Q
Co-ownership
A
Title ownership held by two or more persons.
6
Q
Corporation
A
An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.
7
Q
Fiduciary
A
One in whom trust and confidence is placed; a reference to a real estate professional employed under the terms of a listing contract or buyer representation agreement.
8
Q
Partnership
- types of partnership
A
An association of two or more individuals who carry on continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than a single entity separate from individual owners.
Types of partnership include general and limited.
9
Q
General partnership
A
A typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation.
10
Q
Limited partnership
A
A business arrangement whereby the operation is administered by one or more general partners and funded, by and large, by limited or silent partners, who are bylaw responsible for losses only to the extent of their investments.
11
Q
Joint tenancy
A
Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants.
Upon the death of a joint tenant, the decedent’s interest usually passes to the surviving joint tenant or tenants by the right of survivorship.
12
Q
Right of survivorship
A
Joint tenancy
13
Q
Land trust
A
A trust in which property is conveyed, and in which real estate is the only asset.
14
Q
Limited liability company (LLC)
A
A form of business organization that combines the most attractive features of limited partnerships and corporations.
15
Q
Living trust
A
A trust that is created during the trustor’s lifetime.
16
Q
Model real estate time-share act
A
An act that governs the management, use, and termination of the time-share units.
17
Q
Partition
A
The division of co-tenants’ interest in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through a court procedure.
18
Q
PITT
A
The four unities of tenants in a joint tenancy:
Possession
Interest
Time
Title
19
Q
Possession
A
Owning or occupying a property.
20
Q
Separate property
A
Under community property law, property owned solely by either spouse before marriage, acquired by gift or inheritance during the marriage, or purchased with separate funds after the marriage.
21
Q
Severalty
A
Ownership of real property by one person only; also called sole ownership.
22
Q
Tenancy by the entirety
A
The joint ownership, recognized in some states, of property acquired by husband and wife during marriage.
Upon the death of one spouse, the survivor becomes the owner of the property.
23
Q
Tenancy in common (TIC)
A
A form of co-ownership by which each owner holds an undivided interest in real property as if each were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have the right of inheritance.
24
Q
Tenant
A
One who holds or possesses land or tenements by any kind of right or title.
25
Testamentary trust
A trust that is established by will after one’s death.
26
Time-share
A form of ownership interest that may include an estate interest in property and that allows use of the property for a fixed or variable time period.
27
Town house
A type of residential dwelling with two floors that is connected to one or more dwellings by a common wall or walls. Title to the unit and lot vest in the owner who shares a fractional interest with other owners in any common areas.
28
Trust
A fiduciary arrangement whereby property is conveyed to a person or an institution, called a trustee, to be held and administered on behalf of another person, called a beneficiary. The one who conveys the trust is called the trustor.
29
Trustee
One whim something is entrusted and who holds legal title to property and administers the property for the beneficiary. Can also be a member of a board entrusted with the administration of an institution or organization, such as a cooperative.
30
Trustor
A borrower in a deed of trust loan transaction; one who places property in a trust. Also called a grantor or settler.
31
Beneficiary
The person for whom a trust operates or in whose behalf the income from a trust estate is drawn.
32
Undivided interest
Tenancy in common
33
Uniform Partnership Act
Law that provides for the continuation of an existing business if a partner in a general partnership dies, withdraws, or goes bankrupt.
34
Unity of ownership
| PITT
The four unities that are traditionally needed to create a joint tenancy — unity of title, time, interest, and possession.
35
Unity of possession
Co-owners of a tenancy in common are each entitled to possession and use of the entire property, even though each hold only a fractional ownership interest.
36
True or false
Ownership in severalty occurs when property is owned by one individual, corporation, or other entity.
True.
The term comes from the fact that the sole owner is severed or cut off from other owners.
37
Concurrent ownership is when
Title to a parcel of real estate is help by two or more individuals.
Also called co-ownership.
38
Forms of co-ownership include
1. Tenancy in common (TIC)
2. Joint tenancy
3. Tenancy by the entirety
4. Community property
39
1. In a tenancy in common, each tenant holds an ____ interest in the property.
2. Co-owners have ____ in possession, meaning that each owner is entitled to possession and use of the entire property, even though each holds only a fractional ownership interest.
1. Undivided
| 2. Unity
40
Tenant A and tenant B are tenants in common, each owning a half of total interest in ownership.
```
A = 1/2
B = 1/2
```
Tenant B dies and wills his interest to tenants C and D equally as tenants in common.
```
A = 1/2
C = ?
D = ?
```
C = 1/4
D = 1/4
41
Most states recognize some form of ____ tenancy in property owned by two or more people, whether married or unmarried.
Joint
42
The distinguishing feature of joint tenancy is the ____.
Upon the death of a tenant, the deceased’s interest transfers directly to the surviving joint tenant or tenants.
1. Right of survivorship
43
1. True or false
If there are three or more joint tenants, at each successive joint tenant’s death, the surviving owners acquire the deceased’s interest.
2. The last survivor takes title in ____ and has rights of sole ownership, including the right to pass the property to any heirs
1. True.
| 2. Severalty
44
The four unities necessary to create a joint tenancy are
1. Possession - all tenants hold undivided right to possession
2. Interest - all tenants hold an equal ownership interest
3. Time - all tenants acquire their interests at the same time
4. Title - all tenants acquire their interests by the same document
45
How is a joint tenancy created?
By the intentional act of conveying a deed or giving the property by will or living trust.
46
How to terminate a joint tenancy?
A joint tenancy is destroyed when any one of the four unities of joint tenancy is terminated; possession, interest, time, title.
47
Tenants A, B and C are joint tenants.
Tenant A conveys her interest to tenant D.
Tenant D becomes a ____ with tenants B and C.
Tenant D becomes a tenant in common with tenants B and C.
48
____ is a legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to its termination.
Partition
49
____ is a special form of co-ownership used in some states that allows a spouse to inherit the other spouse’s ownership interest upon death.
In this tenancy, spouses have the right of survivorship; during their lives, they can convey title only by a deed signed by both parties
Tenancy by the entirety
50
____ property laws are based on the idea that spouses, rather than merging into one entity, are equal partners in the marriage; any property acquired during a marriage is considered to be obtained by mutual effort.
Community property
51
____ property generally is real or personal property that was owned solely by either spouse before their marriage, acquired by gift or inheritance by one spouse during the marriage, or purchased with separate funds during the marriage.
Can be mortgaged it conveyed by the owning spouse without the signature of the non-owning spouse.
Separate property
52
True or false
Community property provides the automatic right of survivorship that joint tenancy does.
False - it does not
53
True or false
Spouses can will their half of the community property to whomever they desire, but upon the death of one spouse, the surviving spouse automatically owns one-half of the remaining property. If a spouse dies without a will, half of the community property already belongs to the surviving spouse and the other half is inherited by the surviving spouse or by the decedent’s other heirs, depending on state law.
True
54
Form of co-ownership: ____
Property held:
Each tenant holds a fractional undivided interest with unity of possession only.
Property conveyed:
The tenants can convey or will their individual interest, but not the entire interest.
Tenancy in common
55
Form of co-ownership: ____
Property held:
Unity of ownership. Created by intentional act; unities of possession, interest, time, title.
Property conveyed:
Right of survivorship; cannot be conveyed to heirs.
Joint tenancy
56
Form of co-ownership: ____
Property held:
Spouses each have equal undivided interest in property.
Property conveyed:
Right of survivorship; conveys by deed signed by both parties. One party can’t convey one-half interest.
Tenants by the entirety
57
Form of co-ownership: ____
Property held:
Spouses are equal partners in marriage. Real or personal property acquired during marriage is community property.
Property conveyed:
Conveyance requires signature of both spouses. No right of survivorship; when one spouse dies, survivor owns one-half of total property. Other half is distributed according to will or, if no will, according to state law.
Community property
58
A ____ is a devise by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
Trust
59
1. The person who creates the trust is the ____.
2. The person who benefits from the trust is ____.
3. The ____ is the party who holds legal title to the property and is entrusted with carrying out the trustor’s instructions.
4. ____ is the person who acts in confidence or trust and has a special legal relationship with the beneficiary.
1. Trustor
2. Beneficiary
3. Trustee
4. Fiduciary
60
1. A trust created by agreement during the property owner’s lifetime is a ____ trust.
2. A trust established by will after the owner’s death is a ____ trust.
1. Living
| 2. Testamentary
61
With a ____ trust, the beneficial interest is personal property, while the beneficiary retains management and control of the real property and has right of possession as well as the right to any income produced by the property or proceeds from its sale.
Land trust
62
One benefit of a land trust is that the interest can be transferred by ____.
Assignment
63
A ____ is an association of two or more persons who carry on a business for profit as co-owners.
In a ____, all partners participate in the operation and management of the business and share full liability for business losses and obligations.
A ____ consists of one or more general partners, as well as limited partners. The business is run by the general partners. Each partner is held liable for business losses only to the amount they individually invested.
1. Partnership
2. General partnership
3. Limited partnership
64
A ____ is managed and operated by its board of directors, selected by the owners — its shareholders.
Being a legal entity, it can own real estate in severalty or as a tenant in common with other natural or artificial persons.
It continues to exist until legally dissolved.
Corporation
65
The ____ combines the most attractive features of limited partnerships and corporations. The members enjoy limited liability offered by a corporate form of ownership.
Limited liability company (LLC)
66
____ owners have fee title to interior space of units and share title to common areas.
Transferred by deed, will, or living trust.
Association may be governed by a homeowner’s association (HOA) made up of unit owners.
Condominium
67
Common elements of a condominium typically include
Land, courtyards, lobbies, exterior structure, hallways, elevators, stairways, the roof, as well as recreational facilities such as swimming pools, tennis courts, golf courses, etc.
68
Recurring fees, called ____ are paid by each unit owner of a condominium.
HOA fees
69
Homeowner’s association (HOA) enforced rules regarding operation and use of the property. It is also responsible for
Maintenance, repair, cleaning, and sanitation of common elements.
It must also maintain fire, extended-coverage, and liability insurance.
70
In a ____ a corporation holds title to the land and the building. The corporation offers shares of stock to prospective tenants; each apartment becomes the price of the stock, and the purchaser becomes the shareholder.
Because stock is personal property, the tenant owners do not own real estate but instead own an interest in a corporation that has only one asset: the building.
Tenant-owners of personal property.
Cooperative
71
The ____ of a cooperative control the property and its operation.
Shareholders
72
____ ownership permits multiple purchasers to buy relatively small interests in real estate, typically resort properties. Each purchaser receives the right to occupy the facilities for a certain period.
The developer owns the real estate, while the owner may occupy the facilities for a designated period each year, for a certain number of years until the owner rights terminate.
Time-share
73
1. Ownership in ____ is ownership by one individual, who may be an artificial person, such as a corporation.
2. ____ by two or more individuals may take one of four forms.
3. In a ____, each tenant holds an undivided fractional interest and co-owners have unity of possession. Each interest can be sold, conveyed, mortgaged, or transferred, and will be passed by will or state of law when a co-owner dies.
1. Severalty
2. Co-ownership
3. Tenancy in common
74
In a ____ tenancy, there are four unities (PITT): possession, interest, time, and title.
These tenants enjoy the right of ____.
1. Joint tenancy
| 2. Survivorship
75
A joint tenancy can be terminated by the death of all but one joint tenant, who then owns the property in ____.
A ____ is a legal action to force division or sale of the property.
1. Severalty
| 2. Partition
76
1. ____ is only available to spouses and carried a right of survivorship. This property can only be conveyed by both spouses.
2. ____ property, is acquired during marriage that is not separate property and requires agreement of both spouses to be conveyed.
3. ____ property is owned by one spouse before marriage, or acquired by one spouse during marriage by gift, inheritance, or with the proceeds of the property.
1. Tenancy by the entirety
2. Community
3. Separate
77
1. A ____ is a legal arrangement in which property is transferred by the ____, the person creating the trust, to a ____, to be held for the identified beneficiary.
2. The trustee acts as a ____ in carrying out wishes of the trustor.
3. In a ____, the beneficiary is also the trustor, but the public record will not identify the beneficiary.
1. Trust, Trustor, Trustee
2. Fiduciary
3. Land trust
78
1. A ____ is an association of two or more persons who carry on a business for profit as co-owners in a general or limited partnership provided by state law.
2. In a ____, all partners participate in operation and management, and partners share full liability for business losses and obligations.
3. A ____ has both general and limited partners. The general partners run the business. The limited partners do not run the business and are liable for business losses only up to the amount of the individual’s investment.
1. Partnership
2. General partnership
3. Limited partnership
79
1. A ____ may be permitted by state law and offers its members the benefits of the limited liability of a corporation, the tax advantages of a partnership, and a flexible management structure.
2. A ____ owner holds fee simple title to the airspace of a unit, as well as undivided share in the remainder of the building and land, known as ____, which may be referenced in what are called horizontal property acts.
3. A condominium is administered by a ____ of unit owners that may decide to hire outside property management firm. Maintenance of common elements is funded by ____ charged to each unit owner.
1. Limited liability company (LLC)
2. Condominium, common elements
3. Homeowner’s Association, fees
80
1. In a ____, title to the land and building is held by a corporation, which sells shares of stock to prospective tenants. A purchaser of stock becomes a ____ in the corporation and receives a ____ lease to the apartment for the life of the corporation. The stock is owned as personal property and not real estate.
2. A ____ permits the sale of an estate or use interest that allows occupancy of a property during a specific period of time, typically weekly. This type of ownership permits multiple purchasers to buy interests in real estate, a form of ownership most commonly found with ____ property.
1. Cooperative, shareholder, proprietary lease
| 2. Time-share, resort
81
According to some states, any real property that either spouse owns at the time of marriage remains separate property. Further, any real property acquired by either spouse during the marriage (except by gift or inheritance or with the proceeds of separate property) belongs to both of them equally. What form of ownership is this called?
A. Partnership
B. Joint tenancy
C. Tenancy by the entirety
D. Community property
D. Community property
82
Three people were concurrent owners of a parcel of real estate. When one of the owners died, that interest became part of the deceased’s estate. The deceased was
A. A joint tenant
B. A tenant in common
C. A tenant by the entirety
D. A severalty owner
B. A tenant in common
83
The four unities of possession, interest, time and title are associated with which of the following?
A. Community property
B. Severalty ownership
C. Tenants in common
D. Joint tenancy
D. Joint tenancy
84
A parcel of property was purchased by two friends. The deed they received from the seller at closing transferred the property without stipulating a form of ownership. The two friends took title as which of the following?
A. Joint tenants
B. Tenants in common
C. Tenants by entirety
D. Community property owners
B. Tenants in common
85
Three people are joint tenants with rights of survivorship in a tract of land. One owner conveys his interest to a friend. Which statement is true?
A. The other two owners remain joint tenants
B. The new owner has severalty ownership
C. They all become tenants in common
D. They all become joint tenants
A. The other two owners remain joint tenants
86
A man owns one of 20 units in a fee simple, along with a 5% ownership share in the parking facilities, recreation center, and grounds. What kind of property does he own?
A. Cooperative
B. Condominium
C. Time-share
D. Land trust
B. Condominium
87
A trust is a legal arrangement in which property is held for the benefit of a third party by
A. A beneficiary
B. A trustor
C. A trustee
D. An attorney-in-fact
C. Trustee
88
A legal arrangement under which the title to real property is held to protect the interests of a beneficiary is
A. A trust
B. A corporation
C. A limited partnership
D. A general partnership
A. A trust
89
A person lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan securing the entire property. Like other residents, this person owns a stock in the corporation and has a lease to the apartment. This type of ownership is called
A. Condominium
B. Planned unit development
C. Time-share
D. Cooperative
D. Cooperative
90
An owner purchased interest in a house in Beachfront. The owner is entitled to the right of possession only between July 10 and august 4 if each year. Which of the following is most likely the type of ownership that has been purchased?
A. Cooperative
B. Condominium
C. Time-share
D. Partnership
C. Time-share
91
A corporation is a legal entity, recognized as an artificial person. Property owned solely by the corporation is owned in
A. Trust
B. Partnership
C. Severalty
D. Survivorship tenancy
C. Severalty
92
Which of the following refers to ownership by one person?
A. Tenancy by the entirety
B. Community property
C. Tenancy in common
D. Severalty
D. Severalty
93
A married couple co-owns a farm and has the right of survivorship. This arrangement is most likely
A. Severalty ownership
B. Community property
C. A tenancy in common
D. An estate by the entirety
D. An estate by the entirety
94
The real property interest that takes the form of personal property is
A. Ownership in severalty
B. Cooperative ownership
C. Condominium unit ownership
D. Tenancy in common
B. Cooperative ownership
95
Two people are co-owners of a small office building with the right of survivorship. One of the co-owners died intestate and leaves nothing to be distributed to heirs. Which of the following would explain why the surviving co-owner acquired the deceased’s interest?
A. Severalty
B. Joint tenancy
C. Community property
D. Condominium
B. Joint tenancy
96
Which of the following is most likely evidence of ownership in a cooperative?
A. Tax bill on individual unit
B. Existence of a reverter clause
C. Shareholder stock
D. Right of first refusal
C. Shareholder stock
97
An ownership interest that can be an estate interest or right of use is a
A. Leasehold
B. Time-share
C. Condominium
D. Cooperative
B. Time-share
98
Which statement applies to both joint tenancy and tenancy by entirety?
A. There is no right to file a petition suit
B. The last survivor becomes a severalty owner
C. A deed signed by one owner will convey a fractional interest
D. A deed will not convey any interest unless signed by both spouses
B. The last survivor becomes a severalty owner
99
Which of the following is not a form of co-ownership?
A. Tenancy in common
B. Ownership in severalty
C. Tenancy by the entirety
D. Community property
B. Ownership in severalty
100
If property is held by two or more owners as joint tenants, the interest of a deceased co-owner will be passed to
A. The surviving owner or owners
B. The heirs of the deceased
C. The state, under the law of escheat
D. The trust under which property was owned
A. The surviving owner or owners
