Ch 3 National Ownership - Unit 1 : Chapter 4 : Ownership

tenancy in partnership

-a form of ownership held by business partners, as provided by the Uniform Partnership Act. -grants equal rights to all partners, but the property must be used in connection with the partnership's business. Individual rights are not assignable.

the distinguishing features of the land trust are:

-beneficiary controls property -beneficiary controls trustee -beneficiary identity not on record -limited term

The defining characteristics of tenancy in common or estate in common is

-two or more owners -identical rights -interests individually owned -electable ownership shares -no survivorship -no unity of time

Joint Tenancy

-two or more persons collectively own a property as if they were a single person. Rights and interests are indivisible and equal: each has a shared interest in the whole property which cannot be divided up. -may only convey their interests to outside parties as tenant-in-common interests.

Corporation

A corporation is a legal entity owned by stockholders. An elected board of directors oversees the business. Officers and managers conduct day-to-day activities. Officers and directors may be held fully liable for the corporation's actions, while shareholders are liable only to the extent of the value of their shares. Corporations, like individuals, may own real estate in severalty or as tenants in common.

No survivorship

A deceased co-tenant's estate passes by probate to the decedent's heirs and devisees rather than to the other tenants in common. Any number of heirs can share in the ownership of the willed tenancy.

testamentary trust

A testamentary trust is structurally and mechanically the same as a living trust, except that it takes effect only when the trustor dies. Provisions of the decedent's will establish the trust.

Interest Individually owned

All tenants in common have distinct and separable ownership of their respective interests. Co-tenants may sell, encumber, or transfer their interests without obstruction or consent from the other owners. ( A co-tenant may not, however, encumber the entire property.)

Identical Rights

Co-tenants share an indivisible interest in the estate, i.e., all have equal rights to possess and use the property subject to the rights of the other cotenants. No co-tenant may claim to own any physical portion of the property exclusively. They share what is called undivided possession or unity of possession.

No unity of time

It is not necessary for tenants in common to acquire their interests at the same time. A new co-tenant may enter into a pre-existing tenancy in common.

survivorship

On the death of husband or wife, the decedent's interest passes automatically to the other spouse.

Electable ownership shares

Tenants in common determine among themselves what share of the estate each party will own. For example, three co-tenants may own 40%, 35%, and 25% interests in a property, respectively. In the absence of stated ownership shares, it is assumed that each has a share equal to that of the others.

Expense liability

The failure of individual shareholders to pay monthly expense assessments can destroy the investment of all the other co-op owners if the co-op cannot pay the bills by other means.

conventional trust structure

The trustee holds legal title and has conventional fiduciary duties. The trustor must be a living person, but the beneficiary may be a corporation.

community property

This type of ownership defines property rights of legal spouses before, during, and after their marriage, as well as after the death of either spouse.

Land trust

allows the trustor to convey the fee estate to the trustee and to name himself or herself the beneficiary. Applies only to real property, not to personal property. The agreement, or deed in trust, grants the beneficiary the rights to possess and use the property, and to exercise control over the cactions of the trustee.

Living trust

allows the trustor, during his or her lifetime, to convey title to a trustee for the benefit of a third party. The trustor charges the trustee with all necessary responsibilities for managing the property, protecting its value, and securing whatever income it may produce. The trustee may also be ordered to sell the property at a given point. The beneficiary receives all income and sales proceeds, net of the trustee's fees.

Co-owners are called

contenants

The tenancy in common, also known as the estate in common,

is the most common form of co-ownership when the owners are not married.

Partition Suit

legal avenue for an owner who wants to dispose of his or her interest against the wishes of other co-owners. The suit petitions the court to divide, or partition, the property physically, according to the owner's respective rights and interests.

Limited Liability Company (LLC)

offers its members limited liability like a corporation, but income is passed directly to the members and is taxed to them as individual income. The management structure is flexible.

A condominium unit is

one airspace unit together with the associated interest in the common elements.

Partnership

partnership, two or more persons agree to work together and share profits. A general partnership is not a distinct legal entity like a corporation. All the partners bear full liability for debts and obligations.

proprietary lease

tenant is an owner (proprietor) of the corporation that owns the property. The lease has no stated or fixed rent. Instead, the proprietor-tenant is responsible for the unit's pro rata share of the corporation's expenses in supporting the cooperative. Unit owners pay monthly assessments. has no stated term and remains in effect over the owner's period of ownership. When the unit is sold, the lease is assigned to the new owner.

The defining characteristics and requirements of joint tenancy are:

-unity of ownership -equal ownership -transfer of interest -survivorship

equal, undivided interest

Each spouse owns the estate as if there were only one owner. Fractional interests cannot be transferred to outside parties. The entire interest may be conveyed, but only with the consent and signatures of both parties.

Tenancy by the entireties is

a form of ownership traditionally reserved for husband and wife, though now available for same-sex spouses in some states. It features survivorship, equal interests, and limited exposure to foreclosure.

to create a joint tenancy

all owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession. These are referred to as the four unities.

Condominium declarations typically provide for the creation of an owner's association to

enforce the bylaws and manage the overall property. The association is often headed by a board of directors. The association board organizes how the property will be managed and by whom.

Community property law distinguishes real and personal property into categories of

separate and community property.