CA Real Estate Principles: Chapter 3

fee simple absolute

A fee simple estate with no restricitons on its use

corporation

A legal entity that acts through its borad of directors and officers, generally without liability on the part of the person or persons owning it. A domestic corporation is one chartered in California- any other corporation is a foreign corporation in California.

condition subsequent

A stipulation in a contract or transfer o f preoperty that already has taken effect that will extinguish the contract or degeat the property transfer.

estates of tenancy or lease hold

A tenant's right to occupy real estate during the term of the lease; a personal property interest.

testamentary trust

A trust established by will and funded with proceeds from the estate of the decedent.

general partnership or partners or partnership

An association of two or more persons, called the partners, to carry on a business as co-owners for profit.

freehold estate

An estate in land in which ownership is for an indeterminate length of time, as in a fee simple or life estate.

life estate

An interest in real property conveying the right to possession and use for a term measured by the life or lives of one or more persons, most often the holder of the life estate.

real estate syndicate

An organization of real estate investors, typically in the form of a limited partnership.

quasi-community property

Any California real estate acquired by an out-of-state married person that would be considered community property if acquired by a resident of California; any California real estate acquired in exchange for real or personal property located anywhere, when the California real estate would have been considered community property if it had been acquired by a California resident.

S corporation

Business owned by no more than 35 shareholders and incorporated following requirements of Subchapter S of the Internal Revenue Code, which then allows income to flow directly to shareholders, avoiding double taxation.

tenancy in common

Co-ownership of property in equal or unequal shares by two or more persons, each holding an undivided interest without right of survivorship.

partition action

Court proceeding by which co-owners may force a division of the property or its sale, with co-owners reimbursed for their individual shares.

inter vivos trust or living trust

Established during lifetime of trustor/beneficiary to hold title to realproperty and/or other assets and, on death of trustor, to pass title to contingent beneficiary without need for probate.

limited liability compnay (LLC)

For m of business ownership in California that offers owners the limited liability of a corporation while still havign the ability to take part in running the company.

life tenant

Holder of a life estate

leaseholds

Interest of one who leases property.

tenants

Lessee under a lease, one who has the legal right to possession and use of property belonging to another.

landlords

Lessor; one who leases his or her property to another.

community property with right of surviviorship

Method of property ownership by a married couple that specifcally provides for transfer of the interest of the first to die to the spouse, instead of the interest being willed or passed by intestate succession.

trust

Method of property ownership in title is transferred by a trustor to a trustee to be held for the benefit of a beneficiary.

beneficiary

One on whose behalf a trustee holds property conveyed by a trustor; the lender under a deed of trust.

registered domestic partner

One or two persons sharing a residence who filed a Declaration of Domestic Partnership with the secretary of state.

trustor

One who conveys property to a trustee to hold on behalf of (in trust for) a beneficiary to secure the performance of an obligation; borrower under a deed of trust.

trustee

One who holds property conveyed by a trustor on behalf of (in trust for) the beneficiary, to secure the performance of an obligation.

sole proprietorship

Only owner of the business.

tenancy in partnership

Ownership by two or more persons, acting as partners, of property held for partnership purposes.

concurrent ownership

Ownership of property by more than one person, not necessarily in the equal shares

joint tenancy

Ownership of property by two or more co-owners, each of whom has an equal share and the right of survivorship.

limited partnership

Partnership of one or more general partners, who run the business and are liable as partners, and limited partners, investors who do not run the business and are liable only up to the amount invested.

successor trustee

Person who takes control of property held in trust on death or incapacitation of original trustee.

commingling

Placing funds in an inappropriate financial account, such as depositing a deposit check in a broker's business account instead of a trust account.

separate property

Property owned by a married person other than community property, including property owned before marriage, property acquired by gift or inheritance, income from separat property, and property acquired with the proceeds of separate property.

power of termination

Right of the grantor of real estate to retake possession on violation of a limitation or condition on the deed to the grantee

ownership in severalty

Separate ownership; ownership of property by one person only.

unity of possession

The essential element of a cotenancy or other form of co-ownership that gives all co-owners the right to possession of the entire property.

fee simple estate

The greatest interest in real property one can own, including the right to use the property at present and for an indeterminate period of time in the future.

estate

The interest held by the owner of the property.

measuring life

The person, usually the holder of a life estate, against whose life the duration of the life estate is determined.

reversion

The right of future possession and use retained by the grantor of a life estate.

remainder

The right of future possession and use that will go to someone other than the grantor on termination of a life estate.

right of survivorship

The right of surviving cotenants to share equally in the interest of a deceased cotenant; the last surviving cotenant is sole owner of the property.

vesting of title

Time at which titile to real estate is transferred to new owner.

real estate investment trust (REIT)

Way for investors to pool funds for investments in real estate and mortgages, with profits taxed to individual investors, rather than the corporation.