Real Estate - Tenancies

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Tenancy in Severalty (Estate in Severalty)

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Sole ownership by one person. When someone owns property to the exclusion of all other persons. can be a natural person or a legal entity. Property held by the government and corporations are held this way (as the Gov and corporations and considered one person)

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Probated

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This means property either passes to devisees (if there is a will) or his heirs (if there is no will)

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Concurrent ownership

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when 2 or more persons own the same property at the same time as co-owners . . . may be tenants in common, join tenants with the right of survivorship, community property, tenants by entirety, tenants in partnership. In this type of property, co-owners have a:

1) un-devided interest in the property,

2) equal rights of possession

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Undivided Interest

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In Concurrent Ownership, this means each co-owner (tenant) has a right to possession of the entire property. Each owner has an interest in the land, but no specific interest in any one part of the land.

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Unity of Possesion

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In concurrent ownership, this means that each owner has an equal right to occupy all or any part of the property. None of the co-owners can be excluded from the property.

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Tenancy in Common

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a form of concurrent ownership that exists whenever 2 or more natural or legal persons hold an undivided interest in an estate that is passable to their heirs or devisees. Therefore it does not have a right of survivorship. (e.g. Heather and Yon purchased property as tenants in common. When Heather died, her heirs or devisees received her interest and became ________ __ _______with Yon.) . . interests can be:

1) acquired at different times,

2) acquired in different ways (will or deed),

3) equal or unequal amounts. . . while co-owners have undivided interests, they may not have equal interests. Also, a __________ __ _________ is free to sell, transfer, convey or encumber his interest without the consent of any other co-owners.

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Right of Survivorship

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when one co-owner dies, the remaining (surviving) owners acquire that persons land.

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Partition Suit

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when a tenant in common wants to sell his interest, but is unable to, he may file a suit which would force division of the property or a sale of the property with the proceeds being divided among the co-owners.

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Joint Tenancy

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a form of concurrent ownership wherein 2 or more natural persons are joint and equal owners of an undivided interest in property and have a right of survivorship (when one co-owner dies, the interest would be divided equally among the surviving co-tenants. Heirs have no interest in the property.) All tenants must have:

1) equal right of possession,

2) equal interest (50% 2 ways, 25% 4 ways) ,

3) acquire title at the same time,

4) acquire title in the same deed or will.

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Community Property

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only a thing in 8 states and montana is not one of them - all property acquired during marriage belongs to both as community property. neither may sell, convey, or encumber property alone. . . contracts would require both signatures.

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Tenancy by the Entirety

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a common law tenancy that can generally only be created by husband and wife. The main advantage is right of survivorship. If they get a divorce, they become tenants in common.

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Dower

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the right of the wife to a life estate in the dead husbands property

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Curtesy

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the right of the husband to a life estate in the dead wife's property, provided the couple had at least one child

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Inchoate Right

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an expected right to an estate upon the spouses death.

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Uniform Probate Code

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What most states have adopted - a surviving spouse is entitled to a certain share of the deceased spouses estate, and that share is not merely a life estate interest.

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Syndicate

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a group of investors that join together to make and operate a real estate investment. can be formed through general or limited partnership, corporation, trust, tenancy in common, joint tenancy, joint venture, or LLC.

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Partnership

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an association of two or more persons to operate as co-owners of a business for profit. It may be general or limited.

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General Partnership

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with this partnership, all partners are co-equals in ownership and management and have full authority to act on behalf of the partnership and other partners. All partners can be liable for all debts, all partners can act as managers.

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Limited Partnerip

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partners that have limited liability to partnership debts limited to no more than the amount they have agreed to contribute to the partnership. But, they can not participate in the management of the partnership.

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Corporation

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a legal entity that acts as one entity and holds title in severalty (if it is the sole owner), regardless of the amount to stock-holders. In addition, it can hold title to RE with other persons (real or legal entities) as tenant in common or tenant in partnership. Because of its perpetual existence, however, it can not be a joint tenant.

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S Corporation

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a way to avoid double taxation. This type of corporation does not pay corporate income tax. This type of corp can have no more than 75 shareholders.

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LLC

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a business entity that combines the best features of a corporation and partnership. Limited liability. Acts as a limited partnership, wherein each person is a limited partner, but has the ability to participate in management. managers have no personal liability for the companies obligations.

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Joint Venture

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a business entity created to carry out one particular transaction, rather than a series of transactions or a continuing business. May be in the form of general or limited partnership, a corporation, a REIT, a tenancy in common, or a Joint Venture Agreement. Usually formed in construction projects.

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Trust

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Is created when a trustor conveys title to property to one or more trustees.

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Living Trust

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a trust created during a trustor's lifetime

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Testamentary Trust

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a trust created though a persons death through a will.

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Land Trust

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A trust wherein Legal title to the land is transferred to the trustee. The only asset is real estate.

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Real Estate Investment Trust (REIT)

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a trust that is formed to invest in real estate as a long-term investment, providing income from the rentals as well as long-term capital gains when the property is sold. They provide owners with the benefits of corporate ownership without the double taxation if:

1) at least 100 people invest,

2) any 5 investors cannot own more than 50% of the shares in the trust,

3) at least 75% of the trusts assets must be in real estate,

4) at least 90% of the earnings must be distributed to shareholders each year.