Red Real Estate Dynamics Chapter 3

Front 1

What is severalty ownership?

Back 1

When an estate is owned by one person or by a single entity, such as a corporation.

Hint 1

Don't confuse severalty with several. It is single ownership severed or seperated from others

Front 2

What is Concurrent ownership?

Back 2

When two or more people simulataneously own the rights in the same land, they are said to be co-owners or concurrent owners

Front 3

Define tenancy

Back 3

In the law the word tenancy refers to possession of lands and tenements (buildings) bu any kind of right or title, not just to leaseholds. the words "tenancy" and "tenant" refer to ownership and have nothing to do with rentals.

Front 4

What is a Tenancy in Common?

Back 4

A form of concurrent ownership that imposes the fewest restrictions on the co-owners. Each holds separate title (with separate estate) to an undivided interest in the property. A co-owner owns a specific interest in the property as a whole (undivided). Each has the right of disposition without the permission of the other owners as long as their rights are not impacted. They have equal rights of possession.
The shares are inheritible and pass down to the heirs upon the death of a tenant

Front 5

What is joint tenancy

Back 5

The co tenants jointly own a single estate. There is only one title regardless of how many joint tenants there are.

Front 6

Explain "right of survivorship"

Back 6

Upon the death of a joint tenant, that interest in the property automatically ends and passes to the remaining joint tenants, the "survivors". It cannot be inherited nor does it become part of the deceased co-owners estate.

Front 7

What "Unities" must be present to create a joint tenancy

Back 7

Unities of possession, interest, time and title (PITT)

Front 8

Possession (PITT)

Back 8

Each tenant has undivided interest in the property as a whole. Each is entitled to the enjoyment of the property as a whole. The unities of possession is the only unity shared by tenants in common and joint tenants.

Front 9

Interest (PITT)

Back 9

Joint tenants hold equal interest. If there are two co-owners, each has half interest, if there are 3, then each has 1/3 and so on. Also each has the same type of freehold interest. If one owns in fee simple, so do the others

Front 10

Time (PITT)

Back 10

Joint tenants must aquire their interest at the same time. The addition of a new joint tenant at a later date would not be possible unless the existing co-owners and the new co-owner form a new joint tenancy.

Front 11

Title (PITT)

Back 11

Unless restricted by agreement, any joint tenant can sell, lease, or mortgage a share without permision, signature or knowledge of the other joint tenant(s).

Front 12

What is a Partition suit

Back 12

When an agreement on a method for disolving the tenancy cannot be reached, one or more of the co-tenants, without the consent of the others, can file a partition suit in court

Front 13

What is a tenancy in entirety

Back 13

A form of concurrent tenancy exclusively used by husband and wife. It is similar too a joint tenancy in that it requires the unities (PITT) and it also has a unique feature of survivorship.
If husband and wife divorce they become tenants in common. Niether can sell without the others consent, nor can either spouse sue for partition while the marriage lasts.
A creditor cannot force the sale of half the property to satisfy either spouses personal debts.
Georgia does NOT recognize tenancy in common

Front 14

What is community property

Back 14

Another form of co-ownership that only applies to only too husband and wife as long as they are married.

Front 15

What is meant by separate or sole property

Back 15

Property aquired before the marriage or property acquired during the marriage by inheritance or gift. It can be sold or mortgaged without the consent of the spuose.
Georgia is NOT a community property state.

Front 16

What is a tenancy in partnership

Back 16

A partnership is an association ot two or more people who join forces for business purposes

Front 17

What is a general partnership

Back 17

Provided in the Uniform Partnership Act, a general partnership allows the partnership to own property, provided that the partnership operates under a registered trade name. Each partner is jointly and severally (individually) liable for the partnership obligations. creditors must persue the partnership before persuing the individual partners.

Front 18

What is a limited partnership

Back 18

One or more general partners carry on the management of the business and have the same obligations as in a general partnership. The limited partners are investors and have no management involvement. Their liablity is limited to their investment

Front 19

What is a joint venture

Back 19

A general or limited partnership formed to complete a particular biz project, with no intent to establish a permanent relationship

Front 20

What is a limitied liablity company

Back 20

An LLC is unique in that it a has characteristics of a corporation and also of limited partnership.

Front 21

What is a trust

Back 21

A trust is created when a property owner (the trustor) places the title to the property in the hands of someone else (the trustee) for the benefit of a 3rd party (the beneficiary)

Front 22

What is a testamentary trust

Back 22

Created in a Will. The testator for example, might chose to leave the estate in the hands of a capable trustee because the heir is a minor or a person unaccutomed to making biz decisions

Front 23

What is a living trust

Back 23

A living trust is created in the trustors lifetime possibly as a way of avoiding probate costs or minimizing tax liabilities.

Front 24

What is a land trust

Back 24

The land trust is created by a trustor who will also be the beneficiary and who will retain control over management of the property. land trusts are popular among multiple owners who seek protection against the effects of divorce judgement, bankruptcy or guard secrecy when assembling parcels for development.

Front 25

What is a Real Estate Investment Trust

Back 25

A REIT is a Trust that must have at least 100 investors (beneficiaries) to qualify for certain income tax benefits. The trust is managed by a board of trustees who invest in real property or in mortgage loans. The REIT pays no income tax on profits as long as 90% of the income generated is passed through to the beneficiaries each year.

Front 26

What is a syndicate

Back 26

Not a legal form of ownership but a descriptive term for a group of individuals or firms who get together for the purpose of investing in real estate. The real estate owned by the syndicate could be a tenancy in common, a partnership, a corporation or a trust. Most are limitied partnerships. Sales of shares of a syndicate are governed by state securities laws and the salesperson must have a securities license.

Front 27

Condominium ownership

Back 27

Allows multiple owners to have a fee simple title to their individual unit. All other parts of the land and buildings are shared and used in common with other owners

Front 28

Common elements

Back 28

Common areas of a condominium such as land, exterior structure, parking areas, sports facilities etc..

Front 29

Explain common interest in a condominium

Back 29

The percentage of undivided interest in the common areas. Usually determined by square footage.

Front 30

Master deed

Back 30

A document that must be recorded in the county where the project is to be developed according to the State's horizontal property act.
The master deed included the complete legal description

Front 31

Condominium: Declaration

Back 31

The declaration includes a complete description of each unit, the common interest that attaches to each unit, a description of common areas and limited areas and limited common areas, and the statement of permitted use.

Front 32

Condominium: Plat

Back 32

Plat of the land included plans and the specifications for buildings to be constructed.

Front 33

Condiminium: By-Laws

Back 33

By laws establish the framework for the formation of a homeowners association that will have the responsibility for running the community.

Front 34

What are CC&R's

Back 34

condominium owners must abide by the covenants, conditions and restrictions that are rules

Front 35

What is cooperative

Back 35

A form of concurrent ownership when an existing or to be constructed building is owned in severalty by a non profit corporation. Individuals who wish to occupy units in the building buy shares of stock in the corporation and with the stock in the corporation they acquire a proprietary lease on the unit of their choice

Front 36

Chap 3 Ques 1
The right of survivorship is associated with:
A: tenency in common and condominium ownership
B: tenancy by the entireties and joint tenancy
C: tenancy in common and joint tenancy
D: tenancy by the entireties and community property

Back 36

B: Tenancy by entireties and joint tenancy

Front 37

Chap 3 Ques 2
A joint tenancy would be changed to a tenancy in common by:
a: one joint teanant giving his/her interest to the other
b: the death of one of three joint tenants
c: one of two joint tenants selling his or her interests to a 3rd person
d: the death of one of the two joint tenants

Back 37

C one of the two joint tenants selling his/her interest to a 3rd person.

Front 38

Chap 3 Ques 3
Which of the following may own property in severalty?
a: husband and wife together
b: corporation
c: partnership
d: a father and son

Back 38

b: corporation

Front 39

Chap 3 Ques 4
Title held by husband and wife may include all of the following forms of ownership EXCEPT:
a: severalty
b: tenancy of entireties
c: joint tenancy
d: tenancy in common

Back 39

a: severalty

Front 40

Chap 3 Ques 5
The ownership unities of time, title, interest and possession are required to create:
a: an undivided interest in the property as a whole
b: separate ownership
c: cincurrent ownership
d: the right to survivorship

Back 40

D: the right to survivorship

Front 41

chap 3 ques 6
A broker is asked by a husband and wife how they should take title to the home they are buying. The broker should:
A: recommend they consult an attorney
B: recommend they ask the lender
C: explain the difference between joint tenancy and tenancy in common so they can decide
D: ask them what they want in terms of liability and survivorship and then suggest the best method according to the laws of their state.

Back 41

A: Suggest they consult and attorney.

Front 42

chap 3 ques 7
Smith Jones and Black are joint tenants. Smith sells his interest to White. Wth regard to conveyance:
A: Jones, Black and White are now joint tenants
B: Jones, Black and White are now tenants in common
C: White owns a tenant in common with Jones and Black who still own one third each as joint teanants
D: Smith cannot legally convery an interest without a partition suit terminating the co-ownership obligation

Back 42

C: White owns one third interest as a tenant in common with Black and Jones who still own one third each as joint tenants

Front 43

chap 3 ques 8
Harper, Murphy and Jackson own an investment property as tenants in common. Because of a recent business disagreement, Jackson wants to divest himself of the property. If the three owners cannot mutually agree on a plan to settle the matter, Jackson may seek an equitable distribution of the property by filing a:
A: lis pendens
B: partnership agreement
C: partition suit
D: declaration of severalty

Back 43

C: Partition suit

Front 44

chap 3 ques 9
The land on which a high rise condominium stands is owned by:
A: a non profit corporation
B: the individual unit owners as tenants in common
C: a syndicate
D: a limited partnership

Back 44

B: The individual unit owners as tenants in common,

Front 45

chap 3 ques 10
A deed in favor of James and Rosen with the stated proportionate interests of one third and two thirds respectively, without survivorship, creates:
A: joint tenancy
B: tenancy in common
C: severalty ownership of the property
D: a general partnership

Back 45

B: Tenancy in common

Front 46

Laura occupies an appartment in a multiple unit building. Each Month she pays the association an assessment her share of the
mortgage payment, property taxes, and a fee for building maintenance. The form of ownership that Laura shares with the other individual unit owners is:
A: condominium
B: time share
C: limited partnership
D; cooperative

Back 46

D: cooperative

Front 47

chap 3 ques 12
Which of the following is not compatible with joint tenancy:
A: Probate
B: Survivorship
C: Equality of rights
D: rights of possession

Back 47

A: Propate

Front 48

chap 3 ques 13
Certain unities are necessary for joint tenancy. They are:
A: Possession and interest
B: Place and time
C: time and survivorship
D: survivorship and possession

Back 48

A: Possesion and interest

Hint 48

C cannot be right because survivorship only occurs if possession and interest have already occured

Front 49

chap 3 ques 14
A form of condominium ownership especially desirable for properties in resort areas where each unit is sold to multiple buyers is called:
A: proprietary leasing
B: condominiums cooperatives
C: time sharing
D: condominium syndicates

Back 49

C: Time sharing

Front 50

chap 3 ques 15
Which of the following tenancies refers to ownership?
A: In common
B: At will
C: At sufferance
D: for years

Back 50

A: in common

Front 51

chap 3 ques 16
What is the one unity in a tenancy in common ownership?
A: Interest
B: Possession
C: Time
D: Title

Back 51

B: Possession

Front 52

chap 3 ques 17
Prior to John's marriage to Mary he owned a forty acres of land. While they were married John paid $85,000 for a new home and Mary inherited a $220,000 apartment building. If they live in a state that recognizes community property, which of the following represents their community property?
A: forty acres of land
B: Home
C: Apartment building
D: none of the above

Back 52

B: Home

Front 53

chap 3 ques 18
A married women and an unmarried man may not own real estate as:
A: tenants in common
B joint tenants
C: tenants by the entireties
D: general partners

Back 53

C: tenants by the entireties

Front 54

chap 3 ques 19
Phil, Tom and Bill form a partnership to buy a duplex. Phil and Tom invest $15,000.00 each. Bill agrees to accept all management responsibility and liability for the partnership. What kind of partnership did they form:
A: general
B: Limited
C: Special
D: Trust

Back 54

B: Limited

Front 55

chap 3 ques 20
The owner of a cooperative unit:
A: owns stock in a non profit corp
B: holds fee simple title that may be sold, mortgaged or leased.
C: owns the unit in Fee simple with an undivided interest in the common elements
D: holds title in partnership with the other unit owners

Back 55

A: owns stock in a non profit

Front 56

chap 3 ques 21
A creditor may seek satisfaction of a debt from the personal assets of each co-owner of a:
A: general partnership
B: limited partnership
C: cooperative
D: all of the above

Back 56

A: General Partnership

Front 57

chap 3 ques 22
Kristin has purshased a condominium apartment in Happy Gardens. Which of the following statements about Kristins ownership is true?
A: She is entitles to the exclusive use to the lawn in front of her unit.
B: She has no liability if another owner in her building is foreclosed
C: Her monthly mortgage payment includeds principle interest taxes and hazard ins.
D: she can deduct the cost of the swimming pool from her monthly maintenance fee if she does not use the pool.

Back 57

B: She has no liability if another owner in her building is foreclosed

Front 58

chap 3 ques 23
A cooperative owner is assured use of an individual unit for the life of the corporation through the use of a: Trust agreement
B: cooperative declaration
C: proprietary lease
D: partnership agreement

Back 58

C: Proprietary lease

Front 59

chap 3 ques 24
A form of ownership that involves one party holding title for the benefit of another who retains full control over the property is a:
A: real estate investment trust
B: land trust
C: syndicate
D: limitied partnership

Back 59

B: land trust

Front 60

chap 3 ques 25
The directors of a condominium association are elected by:
A: the officers
B: the owners
C: the occupants
D: the management company

Back 60

B: The owners