Forms of Real Estate Ownership Flashcards

Forms of Real Estate Ownership Flashcards How does the death of one of a corporations directors affecr the corporation?The answer is does not affect title to property owned by the corporation. The corporation is a separate entity in itself.Corporations live forever and the corporation would simply replace the director without any discontinuation of operations.Ownership by severaltyOwnerhsip of the property is held by one person. This includes all rights to the property (PCEED) Possession, Control, Enjoyment, Exclusion and Disposal. (One way to remember severalty - to severe ownership from all others) Condomanium OwnershipOwner has a fee simple title to the unit then hold a tenancy is common ownership in the common area. Common areas include the lobby, elevator, hallways, parking lot, roof and recreational areas. Places such as balconies are considered limited common areas and must follow property convenant with regards to furniture and maintenance.Eventhough state condomanium law allows for tennancy in common ownership of common areas, it does not allow owners the right to partition that most tenants in common have.Community Property LawsThese are based on the idea the spouses, do not merge into one entity, but are equal partners during the marriage.Under these laws any property acquired during the marriage is viewed as acquired through mutual effort. The

law recognizes two forms of property: Separate and

community. Only nine states uphold this type of law today and the laws vary widely berween these states.Operation and management of a cooperative Operation and management of a coop is determined by the corporation's bylaws. The shareholders of a coop have control over the property and it's operation through their control of the corporation. They elect officers and directors who are responsible for the running of the corporation and the operation of the building.Three types of partnership are:PartnershipGeneral partnershipLimited Partnership Three forms of real estate ownershipOwnership in severalty - One ownerCo-ownership - More than one ownerOwnership by a trust - Property held in benefit for another Business OrganizationA legal entity that exists independently of it's members.Uniform Partnership Act (applies to General Partnership)Laws adopted by almost all states that allow for partnerships to dissolve and reorganize upon the withdraw, death or bankruptcy of a partner to enable the partnership to continue to conduct business.

Terminating Joint TenancyAll owners who hold joint tenancy on a property have the right to transfer their interst in the property. When this is done, the new owner hold ownership as a tenancy in common. If the property is held by only two joint tenants, then the joint tenancy is terminanted and the property is held in tenanacy in common. If there are more than two owners, the new owner hold the property in a tenancy in common ownership while the remaining joint tenants still

hold the property in joint tenancy. (ie: if three people own

the property and one transfer his memebrship to his son, the son becomes a tenant in common holding 1/3 of the property. The remaining joint tenants hold 2/3 of the property. If one of the joint tenants dies, the remaining joint tenant inherits the deceased's interest. Since there are only two owners, the ownership of the property becomes tenancy in common with one owner holding 1/3 interst in the property and the other holding 2/3 interest) Are business entities such as Corporations, LLC and Partnerships cinsudered legal entities that exist separately from their members?The answer is all of these. Business organizations such as limited liability companies, partnerships, and corporations, are legal entities that exist independently of their members.Ownership by a business organization makes it possible for many people to hold an interest in the same parcel of real estate. Investors may be organized to finance a real estate project in various ways. Some provide for the real estate to be owned by the entity; others provide for direct ownership by the investors.Title is held by two persons as joint tenants with rights of survivorship. If one party dies, the deceased party's interest goes The answer is to the co-owner. Rights of survivorship created in joint tenancy mean that title and interest pass to the other owners upon death of one of the joint tenants or co-owners.Land TrustReal Estate is the only thing in a land trust. As with all trusts, the property is usually transferred to a trustee and the beneficial interest goes to a benficiary. Usually the benficiary is the Trustor. The benficiary's interest is in personal property. however, the beneficary is able to retain control over the property and has all the rights of possession . The benficiary is also entitled to any income produced from the property including sales proceeds. Land trust is usually established for land preservation and usually last for only a certain period of time. If the beneficiary does not extend the trust, it will expire. If the trust expires, the trustee is obligated to sell that land and return the proceeds to the beneficiary. One distinguishing feature about this type of trust is that public records usually do not name a beneficiary. Beneficial interest can be

transferred by assignment which eliminates the need for a deed. A beneificairy's interest can be pledged as security for a loan without having a mortgage recorded.Real estate can be owned under a variety of trusts, including living or testamentary trusts, land trusts, and by investors in A real estate investment trust (REIT) General PartnershipAll partners participate in the operation and management of the business and share full liability, business losses and obligations. If one of the partners dies, withdraws or becomes bankrupt, based in common law, the partnership is dissolved and can be reorganized with the remaining partners so the partnership can continue to conduct business. Must states follow the Uniform Partnership Act to help with this.Advantages of Cooperative OwnershipCooperative ownership, despite its risks, has become more desirable in recent years for several reasons. Lending institutions view the shares of stock as acceptable

collateral for financing and the availability of financing expands the transferability of shares beyond wealthy cash buyers. As a tenant-owner, rather than a tenant who pays rent to a landlord, the shareholder has some control over the property. Tenants in cooperatives also enjoy certain income tax advantages. The IRS treats ownership of a cooperative as it does a fee simple interest in a single-family home or condominium in regard to deductibility of loan interest and property taxes, and homesellers' tax exclusions. Finally, owners enjoy freedom from maintenance chores.The condominium form of property ownership can be used for The answer is detached structures. While many types of structure have been designed for or converted to the