Forms of Ownership & Related Concepts

Vocabulary flashcards summarizing key terms and concepts from the lecture on forms of ownership, co-ownership unities, business entities, trusts, and common-interest properties.

Ownership in Severalty

Title held by one person or legal entity alone; also called tenancy in severalty or sole ownership.

Co-Ownership (Concurrent Ownership)

Any form of ownership in which two or more people share title, each holding an undivided interest.

Unity of Possession

All co-owners have the same right to possess the entire property.

Unity of Interest

All co-owners hold equal ownership shares.

Unity of Time

All co-owners acquire their interests at the same moment.

Unity of Title

All co-owners receive title through the same deed, will, or court order.

Unity of Person

Co-owners are considered one legal entity (e.g., spouses); required for tenancy by the entirety.

Tenancy in Common

Co-ownership with undivided interests that may be unequal and with no right of survivorship.

Joint Tenancy

Co-ownership with equal undivided interests and a right of survivorship; requires the four unities.

Tenancy by the Entirety

Form of co-ownership for spouses; includes right of survivorship and requires all five unities.

Right of Survivorship

Upon a co-owner’s death, the decedent’s interest automatically passes to surviving co-owners.

Partition (Voluntary)

Co-owners mutually agree to terminate co-ownership and divide property or proceeds.

Partition (Judicial)

Court-ordered division or sale of co-owned property when owners cannot agree.

Devise

Transfer of real property through a will after the owner’s death.

Descent

Transfer of property to heirs according to state law when someone dies intestate.

Operation of Law

Automatic transfer of property rights by statute (e.g., divorce decree).

Marital Property

Property acquired during marriage that is considered jointly owned in some states.

Non-Marital (Separate) Property

Property owned before marriage or received individually by gift or will during marriage.

Community Property

System where spouses are equal owners of property acquired during marriage.

Sole Proprietorship

Business owned by one person (or spouses) who is personally liable for all debts.

Partnership

Business entity with two or more owners sharing profits, losses, and management.

General Partnership

All partners manage the business and bear unlimited liability for debts.

Limited Partnership

At least one general partner manages; limited partners have liability only to the extent of investment.

Corporation

Legal person owned by shareholders; can hold property in severalty or as tenant in common.

Limited Liability Company (LLC)

Entity owned by members with limited liability and pass-through tax benefits.

Syndicate

Group or entities that join to invest in real estate; not itself a legal form.

Joint Venture

Two or more parties collaborate on one project or a series of related projects.

Trust

Legal arrangement where a trustor transfers property to a trustee for a beneficiary.

Trustor

Property owner who conveys title into a trust.

Trustee

Party who holds and manages trust property for beneficiaries.

Beneficiary

Person or entity that benefits from a trust or is entitled to its proceeds.

Land Trust

Trust whose sole asset is real estate; beneficiary often directs management and may also be trustee.

Real Estate Investment Trust (REIT)

Trust with 100+ investors that owns income-producing real estate and distributes 95% of taxable income.

Condominium

Form of ownership with fee simple title to a unit and undivided interest in common areas.

Common Areas

Portions of a condo or co-op property owned by all residents as tenants in common.

Limited Common Areas

Common elements owned by all but reserved for exclusive use of one unit (e.g., balcony).

Condominium Declaration (Master Deed)

Document recorded to create or convert property to condo ownership and define rights.

Horizontal Property Acts

State laws that establish legal framework for condominium ownership and financing.

Association Fees

Monthly charges paid by condo or co-op owners for common expenses and reserves.

Bylaws (Condo/Co-op)

Rules governing the operation, elections, and meetings of the owners’ association.

CC&Rs

Covenants, conditions, and restrictions recorded by a developer to set private use limitations.

Cooperative (Co-op)

Building owned by a corporation; residents own shares and receive proprietary leases to units.

Proprietary Lease

Long-term lease allowing a co-op shareholder exclusive occupancy of a unit.

Share Loan

Financing secured by shares in a cooperative corporation rather than a mortgage on real estate.

Townhome

Ownership in fee simple of a unit plus land beneath, with undivided interest in shared areas.

Timeshare

Multiple buyers purchase use rights to a property for specific time periods, often paying annual fees.

Blue Sky Laws

State regulations governing the sale of securities to protect investors from fraud.

Security (Investment)

Financial interest in a business without management authority; regulated by the SEC.

Undivided Interest

Ownership giving a co-tenant the right to possess the whole property rather than a specific part.

Unity of Title (Repeat)

All co-owners obtain ownership through the same instrument.

Unity of Time (Repeat)

All co-owners receive their interests simultaneously.