Unit 4

Forms of Real Estate Ownership

severalty

ownership by one individual, who may be an artificial person, such as a corporation.

Co-ownership

title ownership held by two or more persons may take one of four forms (tenancy in common, joint tenancy, tenants in entirety, community property)

tenancy in common

A form of co-ownership by which each tenant holds an undivided fractional interest in real estate and co-owners have unity of possession

unity of possession

each owner is entitled to possession and use of the entire property, even though each holds only a fractional ownership interest

tenancy in common

Each interest can be sold, conveyed, mortgaged, or transferred, and will be passed by will or state law when a co-owner dies

partition

a legal action, can be brought by one or more of the tenants in common to force division or sale of the property

Joint tenancy

(unit of ownership) of real estate between two or more parties who have been named in one conveyance as joint tenants

Joint tenancy

there are four unities (PITT): unity of possession, unity of interest, unity of time, and unity of title.

right of survivorship

upon the death of a joint tenant, the defendant's interest usually passes to the surviving joint tenant or tenants by

joint tenancy

can be terminated by death of all but owner who then owns the property in severalty

partition

legal action to force division or sale of the property

tenancy by the entirety

available only to spouses and which carries a right of survivorship. spouses each have equal undivided interest in property

Community property

spouses are equal property in marriage; property acquired during marriage that is not separate property and requires agreement of both spouses to be conveyed

Separate property

property owned by one spouse before marriage, or acquired by one spouse during marriage by gift, inheritance, or with the proceeds of separate property

trust

legal arrangement in which property is transferred by the trustor

trustor

 the person who creates the trust

trustee

the party who holds legal title to the property and is entrusted with carrying out the trustor's instructions regarding the purpose of the trust

beneficiary

the person who benefits from the trust

fiduciary

role of trustee, carrying out the wishes of the trustor

Land trust

real estate is the only asset

land trust

the beneficiary is also the trustor, but the public record will not identify the beneficiary

Land trust

created for the conservation of farmland, forests, and other wildlife habitats, coastal lands, and scenic vistas.

partnership

an association of two or more persons who carry on a business for profit as co-owners in a general or a limited partnership, as provided by state law

general partnership

all partners participate in the operation and management of the business and share full liability for business losses and obligations

limited partnership

has both general partners and limited partners. The general partners run the business.

limited partners

do not participate in running the business and are liable for business losses only up to the amount of the individual’s investment

limited liability company (LLC)

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

general partnership 

dissolved and must be reorganized if one owner dies, withdraws or goes bankrupt 

corporation

the death of one owner never affects the title to the property &

corporation

can hold title to real estate in severalty

limited partnership

popular method of organizing investors with small investments and limited personal risk

limited partership

the death or withdrawal a the owner may not affect the title if provided in the agreement 

condominium

owner holds fee simple title to the airspace of a unit, as well as an undivided share in the remainder of the building and land

condominium

single units are located in lowrise and highrise complexes, as town houses or stand-alone units

common elements

(referenced in horizontal property acts) 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 the condominium residents

homeowners association

condominium property is administered by

common elements

owned by condominium unit owners as tenants in common

maintenance

of common elements is funded by fees charged to each unit owner

cooperative

title to the land and the building is held by a corporation, which sells shares of stock to prospective tenants

cooperative

shareholder that receives a proprietary lease to the apartments for the life of the apartment ; gives the right to occupy units

cooperative

stock is owned as personal property: the building (interest in corporation)

time-share

permits the sale of an estate or use interest that allows occupancy of a property during a specific period of time, typically weekly

time-share

ownership permits multiple purchasers to buy interests in real estate, a form of ownership most commonly found with resort property

time-share

occupanrs may have either a real property estate or an occupancy use interest