Ch.2 Real Estate Estates and Methods of Holding Title

Flashcards covering real estate ownership, estates (freehold and leasehold), concurrent ownership methods, business organization structures for property, and co-ownership properties like condos and co-ops.

What is the definition of an estate in real property?

An estate is a possessory interest that includes the right to exclusive use and possession of real property, either now or in the future.

How do freehold and leasehold estates differ regarding title?

Someone with a freehold estate has title to the property and is considered an owner, whereas someone with a leasehold estate has possession but does not have title.

What are the characteristics of a fee simple absolute estate?

It is the highest and most complete form of land ownership, being perpetual, freely transferable, and inheritable.

What defines a fee simple defeasible estate?

It is a qualified fee estate where the grantor puts a condition or limitation in the deed; if the specified act or event occurs, the interest will end.

In a life estate, what is the 'measuring life'?

The measuring life is the life of the person upon which the duration of the life estate depends.

What is a life estate 'pur autre vie'?

It is a life estate where the measuring life is someone other than the life tenant (French for 'for another life').

What is the difference between an estate in reversion and an estate in remainder?

An estate in reversion is a future interest held by the grantor or their heirs; an estate in remainder is a future interest held by someone else (a remainderman).

What is the 'just cause' requirement in California regarding leases?

Under California law, a landlord typically needs just cause to terminate a lease at the end of its term or to terminate a tenancy at will.

What is a 'chattel real'?

A chattel real is personal property that is closely tied to real estate, often used to refer to a leasehold estate.

Define a 'term tenancy' (estate for years).

A leasehold estate that lasts for a fixed term (years, months, weeks, or days) and is created by express agreement.

What is a 'periodic tenancy'?

A tenancy that continues from rent period to rent period (such as month-to-month) until one party gives notice of termination.

What is a 'tenancy at sufferance'?

A situation where a tenant who lawfully took possession stays on after the lease ends without the landlord's permission (also called a holdover tenant).

What is 'ownership in severalty'?

Ownership by one individual, which can be a natural person or an artificial person (like a corporation or city).

What are the 'four unities' required for a joint tenancy?

Unity of possession (equal right to possess the whole), interest (equal ownership interest), time (acquired at the same time), and title (acquired by the same deed or will).

What is the 'right of survivorship' in a joint tenancy?

When a joint tenant dies, their interest automatically passes to the surviving joint tenants rather than to their heirs.

What is 'tenancy in common'?

A form of concurrent ownership where two or more persons have undivided interests in a property; it requires only unity of possession and has no right of survivorship.

Define 'community property' in California.

Property owned concurrently and equally (50% interest each) by spouses or registered domestic partners that was acquired during the marriage/partnership.

What is the 'joinder requirement' for community property?

The requirement that the signatures of both spouses are needed to sell or encumber community real property.

What is the main disadvantage of a general partnership?

Each partner may be held personally liable for the debts and obligations of the partnership if claims cannot be satisfied by partnership property.

In a corporation, who elects the board of directors?

The stockholders (or shareholders) elect the board of directors, who then supervise the officers.

What are the requirements for a Real Estate Investment Trust (REIT) to avoid double taxation?

It must have at least 100 investors and must distribute at least 90% of its income to them.

How is ownership structured in a condominium?

The resident owns a unit in fee simple and shares ownership of common elements (like pools or lobbies) as tenants in common with other owners.

What is a 'limited common element' in a condominium?

A feature (like an assigned parking space or balcony) owned by all unit owners as tenants in common but reserved for the exclusive use of a specific unit.

How is a cooperative (co-op) different from a condominium in terms of title?

In a co-op, a corporation holds title to the whole property; residents do not own their units but instead own shares in the corporation and hold a proprietary lease.