Principles and Practices Chapter 9 and 10

A ___________ is a device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.

A trust chapter 9 page 182

A parcel of property was purchased by two friends. The deed they received from the seller at the closing conveyed the property to them without further explanation. They took title as which of the following? A. joint tenants B. tenants in common C. tenants by entirety D. Community property owners

B. tenants in common Chapter 9 page 179

A twin single is owned by three friends as tenants in common.When one of them dies, to whom will the deceased's interest pass? A. The two remaining friends equally B. The deceased's heirs C. The state, by the law of escheat D. The two remaining friends in joint tenancy

B. the deceased's heirs chapter 9 page 170

product- grant person giving product___________________ person receiving product__________________

Grantor grantee chapter 9 page 178

_______ ____________ is a real or personal property that was owned solely by either spouse before the marriage. It also includes property acquired by gift or inheritance during the marriage. Any income earned from a persons separate property remains part of his or her _______ __________. ____________ _____________ can be mortgage or conveyed by the owning spouse without the signature of the nonowning spouse.

Separate property

True or false; Business associates can hold title to a parcel of real estate as survivorship tenants, and their spouses, if any, are not required to join in a conveyance in order to waive dower rights.

True

True or false; Community property does not provide an automatic right of ownership, as joint tenancy does, Ohio is not a community property state.

True

True or false; There is no dower in survivorship tenancy in Ohio.

True

True or false Depending on the type of trust and its purpose, the parties to a trust may either be individuals or legal entities. Real estate also may be held by a number of people in a real estate investment trust or REIT

True chapter 9 page 182

True or false: State law usually provides that unit owners do not have the right to partition that other tenants in common have. Condominium ownership is not restricted to high rise buildings, low rises, town houses, and detached structures can all be condominiums.

True chapter 9 page 186

True or false Condominium laws often called horizontal property acts have been enacted in every state, including Ohio.

True Chapter 9 page 186

True or False: Generally speaking, a syndicate is two or more people or firms joined together to make and operate a real estate investment. It may be organized into a number of ownership forms, including coownership i.e. tenancy in common, joint tenancy, partnership, trust, LLC, or corporation.

True chapter 9 page 185

True or false; One of the main advantages of corporate ownership of income property is that the profits are subject to double taxation. As a legal entity, a corporation must file an income tax return and pay tax on its profits. The portion of the remaining profits distributed to shareholders as dividends is taxed again as part of the shareholders' individual incomes.

True chapter 9 page 185

True or false; The members of an LLC enjoy the limited liability offered by a corporate form of ownership and the tax advantages of a partnership. In addition the LLC offers flexible management structures without the complicated requirements of S corporation or the restrictions of limited partnerships.

True chapter 9 page 185

true or false; As a legal entity, a corporation continues to exist until it is formally dissolved. The death of the officers or directors does not effect the title to property owned by the corporation.

True chapter 9 page 185

True or false Tenancy by entirely is no longer available in Ohio.

True tenancy by entirety could be validly created between 1972 and 1985. Those existing tenancies were grandfathered after the abolition of tenancy by the entirety so this form of ownership still exists in some instances. chapter 9 page 181

In Ohio, title to real estate may be held by a trustee for the benefit of a beneficiary. This may be a trust established under a ________ or a _______ _________.

Will or trust agreement chapter 9 page 183

A property owner may provide for his or her own financial care or for that of the owners family by establishing a trust. This trust may be established by will after the owners death known as a _______ ________ _____.

a testamentary trust chapter 9 page 182

Each spouse has an equal, undivided interest in the property, each in essence owns the entire estate. During the owners lives, title can be conveyed only by a ______ _____ ____ ___________ _____. one party cannot convey half an interest. On the death of one spouse full title automatically passes to the surviving spouse- tenancy by the entirety is a survivorship estate.

deed signed by both parties chapter 9 page 181

Product- devise person giving the product________________ person receiving product __________

devisor devisee chapter 9 page 178

Community property consists of real and personal property, acquired by either_______ ______________ ___________ ________. Any conveyance or encumbrance of community property requires the signatures of both spouses. When one spouse dies, the survivor automatically owns one half of the community property. the other half is distributed according to the deceased spouses will. If the spouse dies without a will, the other half is inherited by the surviving spouse or by the decedents other heirs depending on state law.

either spouse during the marriage chapter 9 page 182

True or false; One or more persons may form a limited liability company. the articles of organization are signed and filed with secretary of state and must provide the name of the company. nothing else is required by the state.

false one or more persons may form an llc articles are signed and filed with secretary of state must provide name of company and period of duration which maybe perpetual Any other provisions that are from operating agreement or that are not consistent. with applicable law and that members elect to set out in the articles for regulation of the affairs of the company. A written operating system must be executed by all LLC members if there is any deviation from Ohio's default laws regarding management and taxation. chapter 9 page 186

true or false; Ohio recognizes some form of joint tenancy

false, Ohio does not recognize joint tenancy chapter 9 page 179

Land trusts are frequently created for the conservation of ________, ____________, __________, and ___________.

farmland, forests, coastal land, and scenic vistas.

Under condo laws the owner of each unit holds a ______ _________ ____ to the unit.

fee simple title Chapter 9 page 186

A ______ _________ consists of one or more general partners as well as limited partners. The business is run by the general partner or partners. The limited partners are not legally permitted to participate in the management of the business, and each can be held liable for business losses only to the extent of his or her investment. The limited partnership is a popular method of organizing investors because it permits investors with small amounts of capital to participate in large real estate projects with a minimum of personal risk.

limited partnership chapter 9 page 184

General partnerships are dissolved and must be reorganized if one partner dies, withdrawals or goes bankrupt.. In a ______ ________ however the partnership agreement may provide for the continuation of the organization following the death or withdrawal of one of the partners.

limited partnership chapter 9 page 184

Some forms of ownership require the owners to be legally ___________ as a prerequisite to the tenancy

married chapter 9 page 181

Joint tenancy is not available in Ohio, Ohioans do have the opportunity to create a form of survivorship tenancy called ______ __ _________ with ___________ __ ___________. This survivorship tenancy can be used when two or more persons are co owners of real property. Co owners owning as tenants in common may deed the property, to themselves to create a survivorship tenancy on the death of one of the owners. The deceased owners interest is not considered an asset of the probate estate, but title to the interest transfers by contact to the survivor or survivors. Although the deceased owners interest is not subject to probate, it must be included for Ohio and federal estate tax purposes

tenants in common with right of survivorship chapter 9 page 180

product- sublease person giving product- sublessor

person receiving product- subleasee chapter 9 page 178

All of the following involve a fee simple interest Except a (n) A. ownership in severalty B. tenancy for years C. tenancy by the entirety D. tenancy in common

B. tenancy for years Chapter 9 page 177

__________ ___ ___ ___________ is a form of tenancy in which the owners are husband and wife.

tenancy in entirety chapter 9 page 181

A property owner may provide for his or her own financial care or for that of the owners family by establishing a trust. This trust may be created by agreement during the the property owners lifetime _ ___________ ______.

a living trust

A fee simple estate may be held in three basic ways

1. In severalty, where title is held by one individual or legal entity 2. In co-ownership, where title is held by two or more individuals 3. In trust, where a third individual holds title for the benefit of another chapter 9 page 177

A condominium is created when A. the construction of the improvements is completed B. the owner files a declaration in the public record C. the condominium owners association is established D. all the unit owners file their documents in the public record

B the owner files a declaration in the public record chapter 9 page 187

Three individuals were concurrent owners of a parcel of real estate. One individual died, and his interest passed according to his will to become part of his estate. he was a A. joint tenant B. tenant in common C. tenant by entirety D. severalty owner

B. tenant in common Chapter 9 page 178-179

A legal arrangement under which the title to real property is held to protect the interests of a beneficiary is a A. trust B. corporation C. limited partnership D.general partnership

A. trust chapter 9 page 182

A man lives in a very nice urban building. His possessory interest is evidenced by a proprietary lease. What does he own? A. condominium unit B cooperative unit C. time share D. leasehold

B. cooperative unit Chapter 9 page 190

A man conveys a vineyard in trust to his friend, with the instruction that any income deferred from the vineyard is to be used for his cousins medical care. Which of the following statements most accurately describes the relationship of these parties? A. The man is the trustee, the friend is the trustor, and the cousin is the beneficiary B. The man is the trustor, the friend is the trustee, and the cousin is the beneficiary C. The man is the beneficiary, the friend is the trustor, and the cousin is the trustee D. The man is the trustor, the friend is the beneficiary, and the cousin is the trustee

B. The man is the trustor, the friend is the trustee, and the cousin is the beneficiary chapter 9 page 182

A man owns one of 20 townhouses in a new suburban development. He owns the townhouse in fee simple, and a 5 percent ownership share of the parking facilities, recreation center and grounds. What does he own? A. cooperative B. condominium C. time share D. land trust

B. condominium chapter 9 page 186-187

Which of the following best the ownership in a cooperative? A. Tax bill for the individual unit B. Existence of a reverter clause C. Shareholders stock certificate D. Right of first refusal

C. Shareholders stock certificate Chapter 9 page 190

Because a cooperation is a legal entity (an artificial person), real estate owned by it is owned in A. trust B. partnership C. severalty D. survivorship tenancy

C. severalty chapter 9 page 184-185

An individual purchases an interest in a house on the beach. She is entitled to the right of possession only between July 10 and August 4 of each year. Which of the following is most likely the type of ownership she purchased? A. cooperative B Condominium C. Time share D. trust

C. time share chapter 9 page 191

___________ _____________ ____________ are based on the idea that a husband and wife, rather than merging into one entity, are equal partners in the marriage.Any property acquired during a marriage is considered to be obtained by mutual effort. States property laws vary widely. Essentially they all recognize two kinds of property; _____ property and __________ property.

Community property rights separate property and community property chapter 9 page 181

Name four forms of ownership recognized in Ohio

Condominiums cooperatives town houses time share chapter 9 page 186

A man and woman are married, Under the laws of their state, any real property that either owns at the time of their marriage remains separate property, Further, any real property acquired by either party during the marriage (except by gift or inheritance) belongs to both of them equally. This form of ownership is called A. a partnership B. joint tenancy C. tenancy by entirety D. community property

D. community property Chapter 9 page 181-182

A lady owns a fee simple interest in a lakefront cottage, along with 5 percent of the parking lot, laundry room, and boat house. She owns a A. membership camping interest B. time share estate C cooperative unit D. condominium unit

D. condominium unit Chapter 9 page 186-187

A man and woman are married and co own their home with a right of survivorship. Theirs is most likely a(n) A severalty ownership B. community property C. tenancy in common D. estate by the entirety

D. estate by the entirety chapter 9 page 181

All of the following are forms of concurrent ownership except A. tenancy by the entirety B. community property C. tenancy in common D. severalty

D. severalty Chapter 9 page 178

true or false In Ohio, tile to real estate may not be held in a trust

False In Ohio, title to real estate may be held in a trust. chapter 9 page 182

True or false; Only the shares of the profits that are passed to the shareholders are taxed. The profits of the S corporation are not taxed. However, S corporations are not subject to strict requirements regulating regarding there structure, membership, and operation. If the IRS determines that an S corporation has failed to comply with these detailed rules, the entity will be redefined as some other form of business organization, and its favorable tax treatment will be lost.

False S corporations ARE SUBJECT TO strict requirements regulating their structure, membership, and operation. chapter 9 page 185

True or false The individual unit condo owner does not own a specified share of the undivided interest in the remainder of the building and land.

False The individual unit owners also own a specified share of the undivided interest in the remainder of the building and land. chapter 9 page 186

true or false The joint venture is characterized by a time limitation resulting from the fact that the joint ventures intend to establish a permanent relationship.

False The joint venture is characterized by a time limitation resulting from the fact that the joint ventures DO NOT INTEND to establish a permanent relationship. chapter 9 page 185

True or false; Ohio passed a limited liability act in 1997, and the Ohio board of Realtors handles the processing and record keeping of all Ohio LLC's

False Ohio passed a limited liability act in 1997, and the secretary of state handles the processing and record keeping of all Ohio LLC's. Chapter 9 page 186

___________ ____________ or _________ ____________ ___________ is the highest interest in real estate recognized by law. ____ ________is absolute ownership, the owner is entitled to all rights to the property

Fee simple, fee simple absolute. fee simple chapter 9 power point notes

____________ should never give advice on how a buyer should take title, a questions about forms of ownership always should be referred to an attorney.

Licensees

LLC is an acronym for ?

Limited Liability company LLC chapter 9 page 185

The ________ _________________ ____________ ____ is a relatively recent form of business organization,.An ________ combines the most attractive features of limited partnerships and corporations.

Limited liability company LLC LLC chapter 9 page 185

Joint tenancy is not recognized in _________

Ohio chapter 9 page 179

When two or more people acquire title to real estate and the deed does not stipulate the form of the tenancy, the new owners are usually held to have ______________ __________ as tenants in common.

acquired title chapter 9 page 179

A partnership is an association of two or more persons who carry on a business for profit as ___________

co owners chapter 9 page 184

When title to one parcel of real estate is held by two or more individuals, those parties are called_____________ or __________ owners.

co- owners or concurrent chapter 9 page 178

Known as _________ ____________ it includes such items as land, courtyards, lobbies, and exterior structure, hallways, elevators, stairways, and roof as well as recreational facilities such as swimming pools, tennis courts, and golf courses. The individual unit owners own these common elements as __________ ____________.

common elements tenants in common chapter 9 page 186

Name four types of property ownership that have arisen in residential, commercial, and industrial markets. All four forms of ownership are recognized in Ohio.

condominiums cooperatives town houses time share agreements

A _________ is a legal entity , an artificial person created under the authority of the laws of the state which it receives in charter. A corporation is managed and operated by is board of directors.

corporation chapter 9 page 184-185

In a ___________ the charter sets forth the powers of the corporation, including its right to buy and sell real estate based on a resolution by the board of directors. Because the ______ is a legal entity, it can own real estate in severalty or as a tenant in common. Some ____________ are permitted by their charters to purchase real estate for any purpose, others are limited to purchasing only the land necessary to fulfill the entities corporate purposes.

corporation chapter 9 page 185

The ___________ creating a tenancy in common may or may not state the fractional interest held by each co owner. If no fractions are stated, the tenants are presumed to hold equal shares. For example, if five people hold title, each would own an undivided one fifth interest.

deed chapter 9 page 179

In a ____________ ____________ all the partners participate in the operation and management of the business and share full liability for business losses and obligations.

general partnership chapter 9 page 184

A grandfather transfers his oil field to the granddaughters mother, he instructs mother to use income from it to pay for granddaughters college tuition. In this case the grandfather is the ___________ the mother is the ________ and the granddaughter is the _________.

grandfather is the trustor- person who creates trust mother is trustee- the person who holds legal title to the property and is entrusted with carrying out the trustors instructions regarding purpose of trust. granddaughter is the beneficiary - the person who benefits from the trust.

One or more persons may form a ______ ___________ ____________ .The articles of organization are signed and filed with the _________ ___ _________ and must provide the name of the company and the period of duration (which may be perpetual). the designated registered agent, and any other provisions that are from the operating agreement or that are not inconsistent with applicable law and that the members elect to set out in the articles for the regulation of the affairs of the company.A _______ _____ ______ must be executed by all LLC members if there is any deviation from Ohio's default laws regarding management and taxation.

limited liability company secretary of state written operating agreement chapter 9 page 186

common interest developments are typically managed by?

homeowners associations

condominium laws are often called

horizontal property acts, and have been enacted in every state including Ohio.

Most states recognize some form of _________ __________, which is an estate in land owned by two or more people. A valid _____ ___________ requires four unities as opposed to the one unity required for tenancy in common.; unity in time, unity in possession, unity in title, and unity in interest.

joint tenancy chapter 9 page 179

A __________ ____________ is a form of partnership in which two or more people or firms carry out a single business project.

joint venture

In the creation of a __________ ___________, real estate is the only asset. As in all trusts, the title to the property is conveyed to a trustee, and the beneficial interest belongs to the beneficiary. In the case of land trusts the beneficiary is usually also the trustor. While the beneficial interest is personal property, the beneficiary retains management and control of the real property and has the right of possession and the right to any income or proceeds from its sale.

land trusts chapter 9 page 183

product- person giving product - lessor person receiving product-

lease leasee chapter 9 page 178

product- person giving product person receiving product- legatee

legacy legator chapter 9 page 178

product- Mortgage person giving product___________________ person receiving product

mortgagor mortgagee chapter 9 page 178

common interest ownership occurs in developments of housing composed of individually owned units that share?

ownership of common areas. Condominiums, town houses, time share estates, or single family homes that share ownership of common areas, such as swimming pools, landscaping, and parking are all examples .

Co owners of real estate may, by voluntary action and agreement divide their real estate according to their interests. When division among co owners cannot be agreed on voluntarily it may be enforced by suit for ___________, filed in the county in which the land is located. As many as three property owners are appointed by the court as commissioners to divide the real estate into parts, or if this cannot be done, to make an appraisal of the value of the property at the court approved value or if none of the co owners elects to purchase, the court may order the sheriff to sell the property at public auction. Property may not be sold for less than two thirds of its appraised value. The sale proceeds, less the expenses of the sale are delivered to the former co owners.

partition chapter 9 page 181

The Uniform Limited Partnership Act, UPLA - Establishes the legality of the limited partnership entity and provides that realty may be held in the limited ___ _________. Profits and losses are passed through the partnership to each partner, whose individual tax situation determines the tax consequences.

partnerships name. chapter 9 page 184

prodcut -offer

person giving product offeror person receiving product offeree

product- trust

person giving product_ trustor person receiving product- trustee chapter 9 page 178

person giving product- optionor

product- option person receiving product - optionee chapter 9 page 178

One of the distinguishing characteristics of a land trust is that the ____ __________ usually do not name the beneficiary. A land trust may be used for secrecy when assembling separate parcels. There are other benefits as well. A beneficial interest can be transferred by assignment, making the formalities of a deed unnecessary.

public records chapter 9 page 183

There are many similarities between a tenancy in common and a joint tenancy, the distinguishing feature of joint tenancy is the __________ __ _________. in a joint tenancy, the surviving joint tenant or tenants take over the interest of a deceased joint tenant.

right of ownership chapter 9 page 179

An alternative form of business ownership that provides the benefit of a corporation as a legal entity but avoids double taxation is known as a ________ ___________.

s corporation chapter 9 page 185

A land trust ordinarily continues for a definite term, such as 20 years. If the beneficiary does not extend the trust term when it expires, the trustee is usually obligated to_____ ____________ and return the net proceeds to the beneficiary.

sell the real estate chapter 9 page 183

Because the co owners own separate interests, each can ______ , ____________, ___________, or ________ his or her interest without the consent of the other co owners. However, no individual tenant may transfer the ownership of the entire property.

sell, convey, mortgage, or transfer chapter 9 page 179

condos Each unit and its percentage of interest in the common area is deemed to be a ________ ___________ for purposes of real estate assessment and taxation.

separate parcel chapter 9 page 186

When title to real estate is owned by one individual or entity, that individual is said to own the property in

severalty

The term severalty comes from the fact that this sole owner is..............

severed or cut off from other owners. the severalty owner has sole rights to the ownership and sole direction over the transfer of the ownership.When either a husband or wife owns property in severalty, state law may afford how ownership is held chapter 9 page 178

Forms of ownership available are controlled by

state laws

Individuals participate, or invest, in a corporation by purchasing _______. Because ________ is a personal property, shareholders do not have direct ownership interest in real estate owned by a corporation. Each shareholders liability for the corporation losses is usually limited to the amount of his or her investment

stock chapter 9 page 185

A parcel of real estate may be owned by two or more people as tenants in common. In a ______ _________ , each tenant holds an undivided fractional interest in the property. A _______ _______ may hold, say, one half or one third interest in a property. The physical property however, is not divided into a specific half or third.

tenancy in common chapter 9 page 178-179

True or false The trustee is fiduciary who acts in confidence or trust and has a special legal relationship with the beneficiary. The trustees power and authority are limited by the terms of the trust agreement, will or deed in trust.

true chapter 9 page 182

In a tenancy in common the co owners have _______ __ ______ that is, they are entitled to possession of the whole property. It is the ownership interest, not the property, that is divided.

unity of possession chapter 9 page 179

Ohio has adopted the Uniform partnership act, UPA which permits.......................

which permits real estate to be held in the partnerships name. chapter 9 page 184

When one co owner dies, the tenants undivided interest passes according to his or her _______, __________, or ________ _______.

will, heirs, or living trust. chapter 9 page 179