8: Forms of Real Estate Ownership

Unit 8: Forms of Real Estate Ownership

Common Elements

Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally common use by all of the condominium residents. Each condominium owner has an undivided ownership interest in the common elements.

Condominium

The absolute ownership of a unit in a multi unit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners

Cooperative

A residential multiunit building whose title is held by a trust or a corporation that is owned and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possessing a proprietary lease

Co-Ownership

Ownership held by 2 or more persons

Corporation

An entity 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.

General Partnership

A typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation.

Joint Tenancy

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 passes to the surviving joint tenant or tenants by the right of survivorship.

Joint Venture

The joining of 2 or more people to conduct a specific business enterprise. A joint venture is similar to a partnership in that it must be created by agreement between the parties to share in the losses and profits of the venture. It is unlike a partnership in that the venture is for one specific project only, rather than for a continuing business relationship.

Limited Liability Company (LLC)

A business structure that combines the most attractive features of limited partnerships and corporations. The members of an LLC enjoy the limited liability offered by a corporate form of ownership and the tax advantages of a partnership.

Limited Partnership

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, by law, responsible for losses only to the extent of their investment.

Marital Property

All property acquired after the date of marriage for the duration of the marriage, except by gift or will.

Partition Suit

The division of cotenants’ interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures.

Partnership

An association of 2 or more individuals who carry out a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than as a single entity.

Proprietary Lease

A lease given by a corporation that owns a cooperative apartment building to a shareholder for the shareholder’s right as a tenant to an individual apartment.

Right of Survivorship

The right by which, upon the death of a joint tenant, the decedent’s interest passes to the surviving joint tenant or tenants by the right of survivorship.

Severalty

Ownership of real property by one person only. Also called sole ownership.

Syndicate

A combination of people or firms formed to accomplish a business venture of mutual interest by pooling resources. In a real estate investment syndicate, the parties own and/or develop property, with the main profit generally arising from the sale of the property.

Tenancy by the entirety

The spousal joint ownership of the principal residence acquired during marriage. Upon the death of one spouse, the survivor becomes the owner of the property.

Tenancy in Common

A formed co-ownership by which each owner holds an undivided fractional interest in real property as if they were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have rights of inheritance.

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.

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 for common areas.

Trust

A fiduciary arrangement whereby property is conveyed to a person or 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.