Ch. 8 Estates and Interest

after _______, partners may contribute services to the partnership. In the past, a limited partner could contribute only money to the partnership.

1983 Revised Limited Partnership Act

wife's life estate interest in the husband's property. When the husband dies, the wife can make a claim to portions of the decedent's property

Dower legal life estates

the term is applied to the transfer of the title to a person's property to the state when the person dies intestate without any other person capable of taking the property as heir.

Escheat

ToF; In New York community property rights are recognized

F

ToF; New York recognizes dower and curtesy

F

ToF; an owner may not transfer certain individual rights to the property without transferring total ownership

F

_____ must be listed and excluded in the sale contract.

Fixtures not included in sale

Mr. Smith gives his home to his ill cousin Jim with the stipulation that when Jim dies, the home will revert to Mr. Smith or his heirs. Who holds the reversionary interest?

Mr. Smith

The _____ is the document most important to its success because it determines, defines, and apportions the ______.

Operating Agreement of an LLC, rights of the members

rights concerning properties that border moving water such as streams and rivers.

Riparian rights

Because most syndicates intend to make a profit for many people from the efforts of a few people, they must comply with the rules and regulations of the ____

SEC

Mr. Jones leaves his home to his second wife with the provision that, after her death, it will pass to his daughter Sara from his first marriage. Who holds the remainder man

Sara

ToF; New York does not recognize a homestead estate

T

ToF; as soon as the coal or plants are removed from the land, they are not considered land

T

ToF; condominium unit can be owned in all forms of ownership

T

ToF; in some cases, resale of a unit interest may require condominium association's prior approval of a buyer

T

ToF; littoral rights cannot be sold separately or kept when the property is sold

T

ToF; riparian rights cannot be sold or leased separately from the property

T

The ____ eliminated many of the tax advantages for limited partnerships in real estate investment.

Tax Reform Act of 1986

when joint tenants transfer interest, the acquiring party becomes a ____ with the other _____

Tenant in common, joint tenants

under the _____, general partners have ____ for partnership purposes, and cannot ____ to another without the____ of the other partners.

Uniform Partnership Act of 1994, equal rights to use property, transfer their interests, consent

____ are usually favorable for agriculture use.

Zoning ordinances

If the tenant fails to remove a trade fixture, it may become the property of the landlord through _____

accession

any limited partner may ask for ____ from a general partner

accounting

any increase in the land mass that results from the deposit of soil by water or wind action is called

accretions

no unity of time in tenancy in common means that the tenants do not have to ______,

acquire interest at the same time

If the life tenant damages or misuses the property, it is known as an _____.

act of waste

real estate

air, water, land, and everything affixed to the land

estate in land

an interest that include the right of possession

the number of shares purchased reflects the ____ in relation to the property's total value, and the property's ____ the owners must pay.

apartment unit values, fractional expenses

location characteristic is also known as ____ or ___

area preference, situs

as an example of qualified fee simple, the deed may read as "Mrs. Becker gives a 20-acre parcel of land to the Mayfair Foundation _____ it is used for educational purposes".

as long as

While the "____" criterion is the main factor in distinguishing between real and personal property, there are other things to look at

attachment

In New York, tenancy in common is ____ created when a property is sold or given to ____ people, unless stipulated otherwise in the ____

automatically, unmarried, deed

trust; who receives all income and sale proceeds, and what may be deducted from those

beneficiary, trustee's fee

a member of joint venture partnership doesn't necessarily have the power to ___ other members

bind

conturing improvements require a large _______, and usually has ____, making real estate investment ____

capital and labor investment, stable return, illiquid

Trade fixtures, or ____, are items of a tenant's ____ that the tenant has ____ to a landlord's real property in order to ____

chattel fixtures, personal property, temporarily attached, conduct business

Personal property is sometimes referred to as ____ or ____.

chattels, personalty

examples of special purpose property (6)

churches, hospitals, schools, government buildings, public open space, recreational areas

If just a few people hold all the stock in a corporation so they can actively control the business, the corporation is said to be _____.

closely held

property held by two or more people

co-ownership

this type of ownership defines property rights of legal spouses before, during, and after their marriage, or after the death of either spouse

community property

fee simple estate includes the ____ and the tenancy is _____.

complete bundle of rights, unlimited

created by grant from a fee simple property owner to the life tenant

conventional life estate

two types of life estates

conventional, legal

who owns the cooperative

cooperative association

who owns the real property interest in the cooperative, and what type of interest?

cooperative association, undivided interest in the entirety

_____, which are the rules of the corporation, lay out the _____.

corporate bylaws, power of corporate officers

Closely held corporations can avoid considerable _____ by not _____.

corporate taxation, showing profit

in proprietary lease, the tenant is an owner of the ____, instead of the real property, and the lease has no ____, but instead incurs _____, called ____. The lease also has no ____ but remains in effect over the ____.

corporation, fixed rent, pro rate share of corporation's expense, monthly assessment, stated term, ownership duration

A limited liability company (LLC) is a hybrid business entity having characteristics of both a ____ and a ____.

corporation, partnership

who has the first claim on the partnership assets

creditors

right owned by the husband in a deceased wife's property

curtesy legal life estate

Upon the ___ of the owner or other named individual, the life estate passes to the ___ or _____

death, original owner, another named party.

The agreement, or _____, grants the beneficiary the rights to ____ the property and to ____ over the trustee.

deed in trust, possess and use, exercise control

The focus of a legal life estate is ____ and _____ the property rights of ____ upon the death of the husband or wife.

defining, protecting, surviving family,

fee simple absolute is the most ____ and ____ in residential real estate

desirable, common

tenancy by the entirety may terminate by ____, ____, ____ and _____

divorce, death, mutual agreement, joint debt judgment

If a private interest-holder does not have the right to possess, the interest is an ____

encumbrance

an important distinction of cooperatives and condominium is that an individual shareholder of coops failure to pay monthly assessment _____

endangers the entire property

a body of water ____ would be owned by the property owner and not the state

entirely contained within an owner's property

defining characteristics of tenancy in common are

equal and indivisible rights, interest individually owned, electable ownership shares, no survivorship, no unity of time

joint tenants hold ____ in the property without exception.

equal shares

4 major distinction of leasehold estates

estate for years, periodic estate, estate at will, estate at sufferance

All LLCs must file _____ with the _____ of the state where they choose to be organized. further, every LLC must disclose its ____, appoint a ____ and disclose its valid _____.

evidence of existence, secretary of state, company name, statutory agent, business purpose

stipulation by an owner that all of the appliances, including the washer and dryer, are fixtures that will sell with the property, but the refrigerator is personal property and will not be part of the sale is an example of

existence of agreement test

limited partners have the authority to ____ general partner for cause

expel

fee simple interest is aka

fee interest

a perpetual estate that is not conditioned by stipulated or restricted uses.

fee simple absolute

form of ownership that continues indefinitely, provided the use of the property conforms to certain stated conditions

fee simple defeasible

highest form of ownership interest in real estate

fee simple estate

condominium combines ownership of a ____ in the ___ with ownership of a ____, of the property's _____.

fee simple interest, unit's airspace, tenant in common, common elements

a fee simple on condition allows an infinite term, provided the condition is met. The key words in the deed would be "but if."

fee simple on condition

two major distinctions of freehold estates

fee simple, life estate

Sole Proprietorship business owner can register in ____ as well

fictitious name

A personal property item that has been permanently attached to land or a building is called a ____ and it becomes part of the real estate

fixture

Since the beginning of airplane flight, air rights have been restricted to allow planes to fly over a person's property, as long as the ______.

flights do not interfere with the owner's use and enjoyment of the property

distinguishing characteristics of life estate are - The owner enjoys ____ during the estate period. - Holders of the future interest own either a ____ or a _____ interest. - The estate may be created by agreement between ____, or it may be created by __ under ____.

full ownership rights, reversionary, remainder, private parties, law, prescribed circumstances

when a new general partner joins an existing partnership, the general partner would have unlimited liability for ____ to the partnership, but not the whole ____

future debts, existing debts

limited partner's name cannot be used to signify his status as a ____

general partner

who has unlimited personal liability for the debts of the partnership

general partner

limited partnership must have at least one ____ with _____.

general partner, unlimited liability

fee simple estates remain subject to _____ and ____

government restrictions, private interests

the trustor is also known as

grantor

surface rights includes the____, all ____ and all _____, and _____

ground, natural things affixed to the ground, improvements, water rights

life tenant does not have the right to pass ownership to

heirs

No survivorship of tenancy in common means that a deceased co-tenant's estate passes to ___ and ____ by ____. They can ___ the ownership of the ____.

heirs, devisees, probate, share, willed tenancy

the estate of a deceased tenant in severalty passes to ___ by ____

heirs, probate

community property; upon death of the owner, separate property passes to the ____ by ___ or ____

heirs, will, probate

for property that borders a navigable stream, its owner's property extends to the

high-water mark

protects family members against losing their homes to general creditors attempting to collect on debts

homestead legal life estate

two forms of legal life estate

homestead, dower and curtesy

examples of items considered real property under adaptability test

house keys, garbage compactor, custom-made draperies

method of annexation considers ____

how an item is attached

the buyers must inform the broker as to ______, which they may need to discuss with an____.

how they wish to take the title, attorney

three characteristics of land

immobile, indestructible, uniqueness

Because the joint venture is set up for a limited purpose, the _____ of the members is more limited than in general partnerships.

implied authority

the man-made structures attached to the land are called

improvements

five economic characteristics of real property that affects its market value

improvements, location, supply-demand, scarcity, permanence of investment

limited partnership agreement must be ___ and file a ____

in writing, formal certificate

commercial property refers to

income-producing property

property owner's right to use his property may not ______

infringe on other's right to use

During the life estate period, the owner enjoys all ownership rights, provided he or she does not _____, such as by damaging the property or jeopardizing its value.

infringe on the rights of the remainder or reversionary

The phrase "permanently attached" refers primarily to the ____ of the person who attached the item.

intention

an owner installs his grandmother's antique ceiling fan with the intention of removing it when he sells the home, the fan would be considered personal property. this is an example of

intention test

ownership of any combination of the bundle of rights to real property

interest

interest differ according to

interest duration, estate portion, public/private, legal ownership

partners in a partnership may have varying degrees of _____, and they can be ____. thus, real estate ownership by partnership is _____.

interest, bought and sold, tenancy in common

no foreclosure for individual debts in tenancy by entirety means that the estate is subject to foreclosure only for _____

joint debts

although join venture member have ___ of other members, unlike partnership, a member can ___ the joint venture

joint liabilities, sue

Water rights basically concern the rights to own and use water found in ____, ____, ____, and ____.

lakes, streams, rivers, and the ocean

real estate refers to the physical

land at, below, and above the earth's surface, plus all items permanently attached to that land by nature or humans

If the property borders a non-navigable stream, the owner enjoys unrestricted use of the water and owns the ____.

land beneath the stream to its midpoint

allows the trustor to convey the fee simple estate to the trustee and to name himself or herself the beneficiary.

land trust

exception to the common usage of common areas of condominiums are stated in ____

legal documents

partition suit refers to

legal proceeding for an owner to dispose of his interest against the wishes of other co-owners

factors determining freehold or leasehold estate

length of time, owning parties' relationship, specific interest

freehold estate that is limited in duration to the life of the owner or other named person.

life estate

the holder of life estate is called

life tenant

who has the responsibility of protecting the property for the remainderman or reversionary interest

life tenant

A pur autre vie life estate endures over the _____

lifetime of a third person

An ordinary life estate ends with the _____

lifetime of life tenant

limited partnership differs from partnership in that limited partners have ____

limited liability

For limited liability company, the primary corporate characteristic is ___. The primary partnership characteristic is the availability of ____.

limited liability, pass-through income taxation

____ concern properties that border bodies of water that are not moving, such as lakes, bays, seas and oceans

littoral rights

allows the trustor, during his or her lifetime, to convey title to a trustee for the benefit of a third party

living trust

In New York, recreational areas are supervised by the _____, the _____, and/or _____.

local government, DEC, OPRHP

right to use is subject to the limitations of ____ and _____.

local zoning, legality

If the corporation wants to sell all or a majority of its corporate assets, the ____ must approve the sale

majority of stockholders

Real estate is not only made up of land, but also all of the ____ that are _____ attached to the land

man-made structures, permanently

who typically has control of the joint venture members

managing partner

LLCs are managed by their ____ in proportion to their ____. Many LLC operating agreements, however, provide for a ___ or ___ to run the day-to-day operations of the LLC.

members, interest, manager, board of managers

who are the owners of LLC and how many of them are there at least

members, one

four legal tests of a fixture

method of annexation, adaptability, intention, existence of agreement

land includes

minerals, water, air, plants

The right to use a property refers to the right to use it in certain ways, such as ____, ____, ____, and ____ on the property.

mining, cultivating, landscaping, building

owner's rights over property that adjoins a body of water are largely depend on whether or not water is ____ and ____.

moving, navigable

Syndicates are typically used in cases of ____, ____ _____ that require _____ from ____.

multiple, continuing, projects, substantial investments, many sources

If a property borders a stream or river, the owner's riparian rights are determined by whether the water is ____ or not.

navigable,

Owners of properties bordering a ____, ____ body of water enjoy the littoral right of _____, but own the land only up to the ____

navigable, non-moving, unrestricted use, high-water mark

free hold estate has _____ which distinguishes it from leasehold estate

no definite ending date

Public entities may own or lease real estate, in which case they enjoy an estate in land. However, government entities also have ____ interests in real estate which act to ____ within the entity's ______.

non-possessory, control land use for the public good, jurisdiction

Fee simple on condition differs from qualified fee simple in that the reversion of the estate back to the original grantor is ____.

not automatic

examples of commercial property

office building, restaurants, hotels, parking lots

subsurface rights may include the rights to subsurface

oil, gas, minerals, water

two types of conventional life estate

ordinary, pur autre vie

three cycles of syndication

organization, operation, liquidation

If the estate reverts to the ____ or the _____, they are said to have _______

original owner, owner's heirs, reversionary interest

who pays monthly maintenance fees for condominium units

owners

real estate ownership by a corporation is _____

ownership in severalty

when the sole owner is a husband or wife, the ____ holds the title

owning spouse

a section of land defined by boundaries

parcel

along with the exercise of right to sell or give away, _____ and _____ can also terminate joint tenancy or tenancy in common

partition suit, foreclosure and bankruptcy

When two or more people become associated to carry on a business for profit

partnership

in the event of death of a member/partner, which organization is automatically terminated, partnership, or joint venture?

partnership

joint venture is taxed much like the ___, meaning the _____ are responsible for paying taxes

partnership, individual members

joint venture may take any forms of ____, but the most common form is ____.

partnership, limited partnership

According to the Tax Reform Act of 1986, any tax losses from investments in limited partnerships are subject to the _____.

passive activity rules

emblements are considered ___ property

personal

in sole proprietorship, one person who owns the business reports

personal income tax return

The ownership of anything which is not real estate, along with the rights associated with owning the personal property item.

personal property

shareholders of cooperatives owns ____ interest that is subject to ____.

personal property, control by association

when conveying real property, confusion can arise as to wether an item is either ___ or ___ property, as they could be either one depending on the ____.

personal, real, circumstances

members of LLCs may be a ___, ____, ___, or ___.

persons, corporations, partnerships, other LLCs

two major characteristics of real property

physical, economic

syndicate organization stage consists of

planning, property purchase, registration and disclosure, marketing

emblements refer to

plants and crops that need human labor

prime examples of public interest

police power, zoning rights, eminent domain

While all rights are transferrable, the owner can only transfer what the owner in fact ___

possesses

Interests are principally distinguished by whether they include ____.

possession

partnership assets cannot be attached or executed for the ____ of the partners

private debts

The trustor charges the trustee with all necessary responsibilities for _____, _____, and _____. trustee may also be ordered to ___ the property at a given point

property management, protecting its value, securing property income, sell

separate property consists of

property owned before marriage, inheritance or gift property, property from separate property funds, income from separate property

If the property borders a navigable stream, the stream is considered to be a ____

public easement

If the interest-holder is not private and does not have the right to possess, the interest is some form of _____.

public interest

The water and land beneath navigable, non-moving body of water are ____ owned by the ____.

public property, state

Yvonne grants a life estate to Ryan, to endure over the lifetime of Yvonne's husband Steve. Upon Steve's death, Yvonne establishes that her mother, Rose, will receive the property. this is an example of what life estate

pur autre vie

essential characteristics of fee simple defeasible are that the property must be used for/under certain ______, and if those requirements are not met, the estate ____

purpose/condition, reverts to grantor

the deed specifies that the property must be used for a specific purpose

qualified fee simple

two types of fee simple defeasible

qualified fee simple, fee simple on condition

bundle of rights attached to the fee simple absolute includes right of

quiet enjoyment, give away, sell by deed, will, exclude, control within law

land trust applies only to ____ property

real

real property is the combination of ____ and ____ attached to the former

real estate, bundle of rights

The ownership of real estate and the bundle of rights associated with owning the real estate.

real property

two major classification of a property

real property, personal property

riparian rights to use flowing water are conditional to the

reasonable usage, pollution, impediments to the course of flow

If a life estate names a third party to receive title to the property upon the death of the life tenant, the party enjoys a future interest called a _____

remainder interest

syndicate liquidation constitute _______

reselling of property

5 major types of property (according to its purpose)

residential, industrial, commercial, agricultural, special purpose

An encumbrance enables a non-owning party to _____

restrict the owner's bundle of rights

estate refers to interest that include _____

right of possession

gives the property owner the legal right to keep others off the property and to prosecute trespassers.

right to exclude

The right to encumber the property essentially means the _____

right to mortgage the property as collateral for debt

land is a _____ in a world that is 3/4 water

scarce commodity

The right to transfer interests in the property includes the right to ____, ____, _____, ____, or _____.

sell, bequeath, lease, donate, assign ownership interests

tenancy in common - interest individually owned; the tenants can ____, _____, or ____ their interest without _____.

sell, encumber, transfer, hinderance

the intangible rights include rights to

sell, lease, license, give away, share, mortgage, encumber, trade, exchange, use, enjoy, explore, exclude, devise by will, occupy, cultivate, dedicate

Community property law distinguishes real and personal property into categories of _____ and _____ property.

separate, community

while ____ property belongs to one spouse; _____ property belongs to both spouses _____.

separate, community, equally

property held by only one owners

severalty

electable ownership shares mean that tenants in common determine among themselves their ____. in the absence of stated ownership share, it is assumed that the tenants share ____.

shares in estate, equal share

in a cooperative, persons acquire ___ in a non-profit corporation, and the _____ to occupy one of the apartment units

shares, proprietary lease

examples of improvements on a parcel of land that could affect the value of surrounding property

shopping center construction, toxic waste dump sites

when selling a property, the broker must know who will be required to _____ to make the transaction _____, including the listing agreement, the purchase offers, the sales contract and the deed.

sign all the documents, legal,

community property cannot be transferred or encumbered without the ______

signature of both spouses

in joint tenancy, multiple persons collectively own a property as if they were ____

single person

unity of ownership; joint tenants together hold _____

single title

joint ventures differ from partnership in that they are for ___

single undertaking

when property cannot be physically partitioned according tot the owner's respective rights and interests, the court may order the property ____ and _____ among the co-owners

sold, proceeds divided

estate in severalty is also known as

sole ownership

7 different forms of organization with property ownership

sole proprietorship, partnership, joint venture, corporation, LLC, syndicate, reit

Much of the farmland in _____ is subject to oil and gas leases

southwestern New York State

There may be restrictions to right to encumber, such as a ___ to limit the degree to which a homestead may be mortgaged

spouse's right

A corporation is a separate legal entity established under ___ by the filing of ______ with the _____.

state law, articles of incorporation, Secretary of State

coop interest is transferred by assigning both the ____ and ____ to the new buyer

stock certificates, lease

Because a corporation is a separate legal entity, shareholders can ____ the corporation

sue

the amount of a product or service that is available in the market for use or purchase, and how much of the product or service the buyers actually want

supply-demand

applies to the real estate contained within the surface boundaries of the parcel

surface rights

if a joint tenant dies, all interests and rights pass to the _____ free from any _____ or ____ claim

surviving joint tenant, creditor, heirs

upon the death of either spouse, half of the community property passes to the ____, and the other half passes to the ____.

surviving spouse, decendant's heirs

the characteristics of tenancy by entirety are

survivorship, equal undivided interest, no foreclosure for individual debts, termination

a descriptive term for a group of two or more people who combine their financial resources to achieve certain investment objectives.

syndicate

syndicate operation stage consists of

syndicate and property management

while sole proprietorship is easy to organize, being incorporated provides _____ such as ____ and ____.

tax advantages, pension plans, profit-sharing plans

examples of encumbrance (4)

tax liens, mortgages, easements, encroachments

In New York, transfer of property to a married couple is automatically ______ unless the deed says otherwise

tenancy by entirety

a form of ownership reserved exclusively for husband and wife

tenancy by the entirety

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

tenancy in common

three types of co-ownership

tenancy in common, joint tenancy, tenancy by the entirety

when only one joint tenant survives the survivor's interest becomes _____, and the joint tenancy is ____

tenancy in severalty, terminated

whether freehold or leasehold, the owners of estate are called

tenant

Gina, Sue and Mary own a parcel of property as joint tenants. Gina sells her 33% interest to Mona. Mona is now a _____. If Sue dies, ____ would inherit Sue's interest and own ___ of the property. Mona would inherit ___ of Sue's interest. If on the other hand, Mona dies while Sue and Mary are still alive, ____ would inherit her interest.

tenant in common, Mary, 66%, none, Mona's heirs

if the couple divorces, the tenancy by entirety dissolves and the individuals become _____.

tenants in common

if more than one person inherits a parcel of property, they own it as _____ unless it is specified differently in the ____

tenants in common, will

bundle of rights

the tangible and intangible rights attached to the parcel of land

to create a joint tenancy, owners must acquire the property with unity of ___, ____, ___, and ____

time, title, interest, possession

two other items of property that may be either personal or real property

trade fixtures, emblements

property held by a third party for the benefit of someone else

trust

in trust estates, the fee owner called ____ transfers legal title to a fiduciary called ____, who holds and manages the estate for the benefit of another party, the ____.

trustor, trustee, beneficiary

an owner's interest in a property in which two or more parties share ownership

undivided interest

tenancy in common - equal and indivisible rights; means that the tenants have ______ and _____ to _____ attached to the property, and no single tenant may claim possession _____

undivided possession, indivisible interest, equal rights, exclusively

under adaptability test, an item is considered real property if it is ____ to the property whether the item is easily ___ or not

uniquely adapted, removable

defining characteristics of joint tenancy are

unity of ownership, equal ownership, transfer of interest, survivorship

acts of waste include

use of property other than original intention, causing fire, neglecting property tax

condominium unit assessment consist of

value of exclusive interest, pro rata share of common element

when could a corporation lose its limited liability protection due to courts decision

when individual funds are commingled with corporate funds

when negotiating a contract for the sale of real estate, it is critical that the sellers and buyers clearly state in ____ what "____" the property that is being sold

writing, stays with