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Chapter 5
Ownership
| Question | Answer |
|---|---|
| what is a tenancy in severalty? What are the other names? | when a single party owns the fee or life estate (sole ownership, ownership in severalty, and estate in severalty) |
| what is co-ownership? | when more than one person, or a legal entity (corporation), owns an estate in land. |
| what is tenancy in common? | most common form of co-ownership. When there are 2 or more owners who are not married. Have no survivorship, no unity of time, interests are individually owned, identical rights, and electable ownership shares (no equal interest). |
| what is a joint tenancy? | when 2 or more individuals collectively own a property as if they were a single person. Thus having equal rights and interest |
| what are the defining 4 characteristics of a joint tenancy? | unity of ownership, equal ownership, transfer of interest, and survivorship. |
| what is unity of ownership in a joint tenancy? | joint tenants together hold a single title to the property. |
| what is unity of ownership in a tenancy in common? | tenants in common hold a separate title to their individual interests. |
| what is equal ownership in a joint tenancy? | joint tenants own equal shares in the property ex: 25%, 25%, 25% |
| what is transfer of interest in a joint tenancy? | a joint tenant may transfer his or her interest in the property to an outside party, but only as a tenant in common interest. |
| what is a survivorship in a joint tenancy? | when a joint tenant dies, all interests and rights pass to the surviving joint tenants. |
| what happens when one joint tenant is alive? | interest becomes an estate in severalty, joint tenancy is terminated. |
| what is an important aspect of creating a joint tenancy? | all owners must acquire the property at the same time, use same deed, acquire equal interest , and share equal rights of possession. |
| what do we call these aspects of creating a joint tenancy? | the 4 unities: unity of time, title, interest, and possession. |
| what is a partition suit? | a petition for the court to partition (divide) the property (physically). I can terminate a joint tenancy or a tenancy in common. |
| what is a tenancy by the entireties? | form of ownership traditionally reserved for husband and wife. Estate is owned as if there was one owner. Upon death of spouse, other spouse gets the estate. |
| What is a community property form of ownership? | property rights of spouses before , during, after marriage, and after death of spouse. |
| what are the 2 categories community property law distinguishes real and personal property into? | separate and community property. |
| what is separate property? | property owned by either spouse BEFORE the marriage. (inheritance or gift). Separate property owned by spouse, free from other spouses claims. |
| what is community property? | all other property acquired DURING the marriage ex: house can not be transfered or encumbered without other spouse. |
| what is tenancy in partnership? | form of ownership held by business partners, equal rights, but property must be used in connection with business. (think of fee simple defeasible). |
| what is an estate in trust? | where a fee owner transfers legal title to a fiduciary. Who holds and manages the estate for the benefit of another party. |
| what is a trustee? | the one who manages the estate. They maintain the condition and value of the property. ex: trustee - employee |
| what is a trustor? | the one who transfers the legal title of the estate. ex: trustor - manager |
| what is a beneficiary? | the one who benefits from the management of the estate ex: beneficiary - ceo |
| what is a living trust? | allows the trustor to convey title to trustee for benefit of the beneficiary. |
| what is a testamentary trust? | same as a living trust, except that it takes effect only when the trustor dies. |
| what is a land trust? | allows the trustor to convey title to trustee but name themselves the beneficiary. (applies only to real property). |
| what is the conventional trust structure? | the trustor must be a living person, but the beneficiary may be a corporation. |
| what are the 4 distinguishing features of the land trust? | the beneficiary can: -control property -control trustee -not be identified (secrecy) - but have limited term |
| what is beneficial interest, when referring to trusts? | beneficiary's interest in a land trust is personal property. So they can: -transfer -encumber (collateral) -probate interests (property interests in state where person lives). |
| what is a corporation? | a legal entity owned by stockholders. Board of directors oversees the business. (like individuals they may own real estate in severalty or as tenants in common). |
| what is a partnership? | where 2 or more people agree to work together and share profits. 2 types- general and limited. Both partnerships may own real estate. |
| what is a limited liability company? | combines features of the corporation and the limited partnership. Offers members limited liability but income is passed directly to the members. Can own real estate |
| what is a condominium? | combines ownership of a fee simple interest in the airspace within a unit, as a tenant in common with the others in common elements. |
| how are condominium properties created? | by executing and recording a condominium declaration and a master deed. |
| what is a cooperative? | where one owns shares (stocks) in a non-profit corporation or cooperative association. Along with stock, shareholder acquires a property lease to occupy one of the apartments. |
| what do the number of shares in a cooperative reflect? | they reflect the value of the apartment unit in relation to the property's total value. |
| who is the only party in the cooperative association with a real property interest? | the cooperative entity |
| what is a shareholder's interest in a cooperative? | in owning stock and a lease , a co-op unit owner's interest is personal property that is subject to control by the corporation. |
| what is a proprietary lease in a coop? | tenant is an owner (proprietor) of the corporation that owns the property. The lease has no stated or fixed rent |
| what is expense liability in a cooperation? | the failure of individual shareholders to pay monthly expense assessments can destroy the investment of all the other co-op owners. |
| how does transferring of interest work in a cooperation? | the co-op interest is transferred by assigning both the stock certificates and lease to the buyer. |
| what is time-share ownership? | a fee or leasehold interest in a property whose owners or tenants agree to use the property on a periodic, non-overlapping basis. ex: vacation and resort |
| what is a leasehold time-share? | where the tenant agrees to rent the property on a scheduled basis or under any pre-arranged system of reservation. |
| what is a freehold time-share? | tenants in common own undivided interest in the property. |
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