2.14-2.16

Two Types of Ownership in a Condominium

1. The owner of each unit holds a fee simple title to the air space described by the 3D survey. 2.The individual unit owners also own a specified share of the undivided interest in the remainder of the building and land, known as the common elements, as Tenant in Common.

The survey required with each declaration of condominium ownership must indicate the dimensions of each unit. This survey will show the outlines of the lot, the size and shape of each unit, and the elevation or height above base datum for the upper surface of the floor level and the lower surface of the ceiling level. The difference between these two levels represents the airspace owned in fee simple by the unit owner.

3d survey

Illinois real estate licensees (are/ are not) permitted to list and sell cooperative units and interests without obtaining a securities license.

are

1.Lending institutions view the shares of stock as acceptable collateral for financing. 2.The availability of financing extends the possible transfer of shares to modest purchasers in many co-ops. 3. As a tenant owner, rather than a tenant who pays rent to a landlord, the shareholder has some control over the property. 4.Tenants in cooperatives also enjoy certain income tax advantages. The IRS treats cooperatives as it does fee simple interest in single homes or condominiums in regard to deductibility of loan interest, property taxes, and homeseller's tax exclusions. 5.Finally, owners enjoy freedom from maintenance.

benefits of a cooperation

The condominium property is administered by an association of unit owners, often called a homeowners' association (HOA) The association may be governed by a _____ of _________ or another official entity, and it may manage the property on its own or hire a property manager.

board of directors

The operation and management of a cooperative are determined by the corporation's

bylaws

Once the property is established as a ___________, each unit becomes a separate parcel of real estate that is owned in fee simple and may be held by one or more persons in any type of ownership or tenancy recognized by state law.

condominium

Many Illinois municipalities have adopted ________ ordinances to protect tenants in rental buildings whose owners wish to convert to condominiums. The ordinances also protect prospective purchasers. These laws typically allow tenants an opportunity to extend their leases and often guarantee first purchase rights. Additional protections often include disclosure of all material information, structural soundness of the building, adequacy of parking, and a variety of other concerns. These ordinances generally have been upheld by the courts as a valid exercise of ______ _____.

conversion, police power

In a __________, a corporation holds title to the land and building. The corporation offers shares of stock to prospective tenants.

cooperative

In a ____________, a corporation holds title to the land and building.

cooperative

Once the property is established as a condominium, each unit becomes a separate parcel of real estate that is owned in ___ ______ and may be held by one or more persons in any type of ownership or tenancy recognized by state law.

fee simple

Common Elements These include: land, courtyards, lobbies, the exterior structure, hallways, elevators, stairways, roof, recreational facilities. As such, each condominium owner has a _______ ___________ interest in the common elements, meaning the interest can be sold (along with the condo) but not any actual part of the common elements.

fraction undividable intrest

The condominium property is administered by an association of unit owners, often called a

homeowners association HOA

In a cooperative, a corporation holds title to the land and building. The corporation offers shares of stock to prospective tenants. The price the corporation sets for each apartment becomes the price of the _____

stock

Recurring fees (referred to as ___________ or _____ fees ) are paid by each unit owner. The fees often are due monthly, but the schedule may be quarterly, semiannually, or annually, depending on the provisions of the bylaws. The size of an individual owner's fee is generally determined by the percentage of the unit's selling price in relation to the total of the selling price of all units when originally converted or built, but occasionally the percentage of square footage of the unit compared to the total square footage of all units in the __________.

assessments, condo fees, condominium

The corporation (incurs does not incur) costs in the operation and maintenance of the entire parcel, including both the common property and the individual apartments. These costs include real estate taxes and any mortgage payments the corporation may have.

incurs

If the fees are not paid, the association may seek a court ordered ________ to have the delinquent owner's unit sold to cover the outstanding amount.

judgment

The expenses of maintaining and operating the building are paid by the unit owners in the form of fees and assessments. Both fees and assessments are imposed and collected by the ______ ___________).

owners association

A lease given by the corporation that owns a cooperative apartment building to the shareholder, giving the shareholder (tenant) the right to occupy one of the units.

proprietary lease

The purchaser becomes a shareholder in the corporation by virtue of this stock ownership and receives a __________ lease to the apartment for the life of the corporation.

proprietary lease

Because stock is personal property, the cooperative tenant-owners do not own ____ ______. Instead, they own an interest in a corporation that has only one asset, the building, which is personal property.

real estate

The unit can usually be sold or transferred to whomever the owner chooses unless the condominium association provides for a ____ of _____ _______. In such a case, the owner is required to offer the unit at the same price to the other owners in the condominium or the association before accepting an outside purchase offer.

right of first refusal

Unlike in a condominium association, which has the authority to impose a lien on the title held by a unit owner who defaults on maintenance payments, the burden of any defaulted payment in a cooperative falls on the remaining ____________. Each ___________ is affected by the financial ability of the others.

shareholders

are special payments required of unit owners to address some specific expense, such as a new roof. Assessments are structured in the same way as condo fees, owners of larger units pay proportionately higher assessments.

special assessments

In Illinois, creation of condominiums is governed by the Illinois Condominium Property Act (765 ILCS 605/). Under this law, an owner/developer may elect to submit a parcel of real estate as a condominium situation by recording a declaration to which is attached a _____ ___________ ____ of ______ of the parcel showing the location and size of all units in the building. Every unit purchaser acquires the ___ ______ title to the unit purchased, together with the percentage of ownership of the common elements that is set forth in the declaration and that belongs to that unit. This percentage is computed on the basis of the initial list prices of each unit.

three dimensional plat of survey, fee simple

ownership of a unit in annual occupancy intervals

time share

A condominium unit may be mortgaged like any other parcel of real estate. (t/F)

true

An important issue in most cooperatives is the method by which shares in the corporation may be transferred to new owners. The bylaws may require that the board of directors approve any prospective shareholders. In some cooperatives, a tenant-owner must sell the stock back to the corporation at the original purchase price so that the corporation realizes any profits when the shares are resold. In others, if the stock is sold for the latest "going price" on the unit, stock profits may go to the departing tenant or at least be shared t/f

true

Real estate taxes are assessed and collected on each unit as an individual property. Default in the payment of taxes or a mortgage loan by one unit owner may result in a foreclosure sale of that owner's unit. One owner's default, however, does not affect the other unit owners. T/f

true

The association must enforce any rules it adopts regarding the operation and use of the property. The association is responsible for the maintenance, repair, cleaning, and sanitation of the common elements and structural portions of the property. It also must maintain fire, extended coverage, and liability insurance. (t/F)

true

The owner of each unit holds a fee simple title to the air space described by the 3D survey. The individual unit owners also own a specified share of the undivided interest in the remainder of the building and land, known as the common elements, as Tenant in Common. Common Elements

two types of ownership in a condominium

, the property may be removed from condominium status at any time by the unanimous consent of all owners and all lienholders, as evidenced by a recorded ______ instrument. All owners would then be _______ in ______.

written, tenants in common