Unit 8 Unit 8 – Definitions

Unit 8 Unit 8 – Definitions

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Term Definition
Severalty Title is held by one individual or corporation. The holder has sole rights of ownership and discretion to sell, lease, or otherwise transfer part or all ownership to another person.
Co-owership Title is held by two or more individuals. They may co-own the property as tenants in common, joint tenants, or tenants by entirety. In some states, as community
In Trust A third individual holds the title for the benefit of another.
Tenancy in Common Each tenant own undivided fractional interest in the property. for exp; 1/3 or 1/2 of the interest in the property. Co-owners have unity in possession, meaning they entitled to the whole property. The interest is divided not the property. Can be convey
Joint Tenancy Differs from tenancy in common because right of survivorship. Joint tenants collectively own 1 unit. If one dies, the remainder JT get the deceased portion evenly until eventually the last tenant get the title as owner in severalty.
Four Unities of Joint Tenancy Possession (undivided right to possess), Interests (equal ownership interest), Time (all tenants have to establish JT at the same time), and Title (all JTs acquire their interest on same document).
The four requirement for Unities include the following: Title is acquired by one deed. Deed executed and delivered at one time. Deed conveys equal interest to each party. The parties hold undivided possession of the property as joint tenants.
Tenancy by Entirety Some states, including IL, let husband and wife co-own their personal residence . This gives them equal, undivided interest in the property plus rights of survivorship. They can convey deed only if signed by both.
Community Property Laws that state a husband and wife, rather than merging into one entity, are equal partners in marriage. Some states recognized this type of property in 2 ways: separate property and community property.
Trust One person transfers ownership to another person to hold and manage for the benefit of the 3rd party.
Trustee The person who holds legal title to the property and is entrusted by the trustor's instruction regarding that trust. A trustee is a fiduciary, one who acts in confidence or trust and a has a special legal relationship with beneficiary.
Trustor Person who creates the trust.
Beneficiary Person who benefits from the trust.
Land Trust A few states, including IL, a trust in which real estate is the only asset. The title to the property is conveyed to the trustee and the legal benefits goes to the beneficiary.
Real Estate Investment Trust (REIT) Real estate investors directing their funds into a REIT take advantage of the same tax benefits as mutual fund investors.
Partnership Association of 2 or more persons that carry on a business for profit as co-owners. In general partnership, all the partners participate in the operation and management of the business and share full liability for business losses and and obligations.
Limited partnership 1 or more general partners as well as limited partners. General partner(s) run the business and limited partners are not legally allowed to participate and each can be held liable for business losses only to the extent of her investment.
Corporations A legal entity (an artificial person) created under the authority of the laws of the state from which it receives its charter. It's managed and operated by its board of directors. Because a Corp is a legal entity, it can own RE in severalty, or as TIC.
Limited Liability Corporations LLCs Member of LLC enjoy limited liability offered by a corporate form of ownership and the tax advantages of a partnership.
Syndicates Two or more people or firms joined together to make and operate a real estate investment. It's not a legal entity, but be organized to different ownership forms; including co-ownershiip (tenancy in common, joint tenancy) partnership, trust or corporation.
Joint Ventures Partnership in which 2 or more people or firms carry out single business project. it's characterized by a time limitation and do not intend to establish a permanent relationship.
Condominium Ownership Condo laws, also call hotizontal property acts, every state enacted. Under these laws, the owner of each unit own a fee simple title of the unit.The owner also own undivided interest in the remainder of the building and land, aka common elements.
Cooperative Ownership A corporation holds title to the land and building. The corporation offers shares of stock to prospective tenants.
Town House Ownership Type of housing connected by common walls. They are similar to PUDs. Title to each unit and lot is vested in the individual owner. Each owner has fractional interest in the common areas and is proportionately financially responsible.
Timeshare ownership Multiple purchasers to buy interests in real estate, usually a resort property. Each purchaser receives the right to use the facilities for a certain period of time. Its a fee simple interest and occupancy and use of the property are limited to the cont

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