PSI Exam: Property Ownership

Cooperative ownership

"co-op"; occupant is a shareholder who owns stock in the company that owns the complex, and in exchange for agreeing to bylaws and pay the co-op's fees, is granted a proprietary lease interest to occupy the specific unit. Responsible for entire building's property taxes.

Life estate

"conventional life estate": category of estates in property that conveys an estate for the duration of the life of the life tenant. Ex: parent may deed a house to heir, but retain right to use that property for parent's life. Or husband deeds a home to wife for duration of her life, with it going to children of previous marriage on her death. Arises with intentional arrangements.

Dower

"curtesy", property rights of widows and widowers

Fee simple defeasible

"defeasible fee" or "qualified fee" meaning the deed/title has some sort of qualification of its use that makes it subject to being annulled or voided and reverting to the original owner or third party.

Life estate pur autre vie

"life estate for the life of another": measures its duration by the life of someone other than the life tenant. Ex: a caregiver is allowed to live on the property until the death of the specified other person.

Fee simple determinable

"qualifed fee" or "determinable fee" means that should a stated condition occur, the estate automatically ends and grantor has a possibility of reverter or reversionary interest in or right to the property.

Remainder

"remainder interest" means the grantor of the life estate has named someone else to take title, remainderman. Ex: spouse leaving wife the life estate.

Reversion

"reversionary interest" means the estate reverts to or returns to the grantor of the life estate, reversioner. Ex: university purchases a property and grants a life estate

Specific lien

"special", limited to a specific item controlled by the debtor, such as a mortgage on a house or loan or car.

Metes and bounds

"walks" the property. Begins at a POB, then describing the distance and directions along the property line, follows a clockwise direction back to the POB.

Types of title

(1) Clear (good) title: free of restrictions that would limit transfer (2) Marketable title: a reasonable buyer would accept as clear (3) Equitable title: holder's right to acquire ownership and formal legal title; interest that may be sold, assigned, or transferred by the prospective buyer (4) Legal (naked) title: holder has apparent ownership but not full title. Ex: seller has entered into binding sales contract, thereby relinquishing rights to the buyer

Condominium ownership

(1) Fee simple title to the unit (2) Undivided interest in the jointly owned common areas as tenants in common with other association members (3) Horizontal property act: allows ownership of airspaces. NOT responsible for other unit's unpaid taxes.

Legal tests for fixtures

(1) Intention of person who attached the item to make it permanent (2) Method of attachment, annexation, degree of permanence (3) Adaptation of item to use of property, custom-made bookshelf (4) Relationship and general understanding between parties,

Marital property ownership rights

(1) Tenancy by the entireties or entirety, the couple owns the property as one unit, broad property protection against creditors (2) Community property, acquired during marriage, unless exempted by one property as acquired through gift, inheritance, or separate funds (3) Community property with right of survivorship, strengthens the estate transfer and tax benefits of the remaining spouse

Special assessment liens

(1) result from an owner's request for the improvements; voluntary, specific. OR (2) result from municipality-initiated improvement; involuntary, specific

Acre size

43,560 square feet

Annexation (accession)

Also includes additions to the property from natural causes, such as riverfront.

Color of title

Anything that appears to give title, but does not. "Apparent title": forged, inaccurate, or outdated deeds.

Right of Survivorship

As each individual joint tenant passes away, the remaining tenants interest would increase until the last remaining person becomes the sole owner

Priority of liens

Date of redecoration from the first to most recent. However, property tax liens are always superior to other liens, regardless of effective date.

Declaration

Developer's organizational plans. Includes: bylaws, legal descriptions, and surveys, restrictive covenants (CC&R)

Townhouse

Differs from condominium because there is actual ownership from the ground up

Usufruct

Louisiana term for estate similar to life estate, may be used for a less-than-life period. Grants the rights to use property including renting it and keeping monies.

Right of habitation

Louisiana term for when a person has not been granted a full usufruct, but does receive a nontransferable real right to dwell in the house of another.

Common interest ownership

Multiple owners have overlapping, inseparable interest in a property complex: condominiums, townhouses, coops, and timeshares

Easement by prescription (prescriptive easement)

Owners that allow others to use their land without a specific arrangement may lose the right to stop the use if it becomes protected by law. Must meet several legal tests. (1) Must occur regularly for a minimum statutory period required by state law (2) Characterized by open, notorious, and hostile (3) Other terms include: visible, continuous, exclusive, and adverse Post: private property signs to twart claims by providing open, public notice of permissive use.

Non-monetary encumbrances

Physical and legal restrictions as easements, encroachments, both restrict the use/transfer of property. Ex: subdivision covenants, conditions, and restrictions (CC&R) and owner's association rules for most common-interest ownership arrangements.

lis pendens (pending lawsuit)

Property encumbrance that affects marketability of title. Some form of litigation against the property is pending and may become the responsibility of the new owner.

Future interests

Right to acquire the estate upon its termination as a life estate (1) Remainder (2) Reversion

Geodetic survey system

US Coast and Geodectic Survey System, which establishes a series of markers that serve as reference points for orienting accurate surveys.

Joint tenancy

Unity of title, time, possession, interest (equal). *Connecticut: allows unequal interest **Alaska, Ohio, and Oregon: abolished altogether

Intangible (incorporeal) property

abstract, "untouchable", yet very real elements, such as mortgages, rights, and other encumbrances, like stocks and retirement accounts.

Naked owner

actually owns the property in a life estate

General lien

affects all of a debtor's property and assets, as in bankruptcy proceeding or IRS tax lien

Personal property

also known as personalty or chattel. Considered anything unattached and moveable, such as furniture, housewares, lawn mowers, throw rugs. Also intangible assets.

Appurtenant rights

and interests are said to run with the land, which means they remain in full force even if omitted from the language of a deed during the property transfer.

Intangible assets

bank accounts, stocks, securities, financial instruments.

Party wall easement

common building wall or stand-alone wall either on or at a property line. Involves both owners in ownership, maintenance, and access issues.

Statutory lien

created automatically by statute; tax lien

Equitable lien

created by court order; judgement lien

Emblements

crops that a tenant generally owns as personal property, may return to harvest even after lease expires. fructus industriales vs fructus naturales.

Lien effective date

day that they are recorded, or officially filed, in the appropriate office of public records. (Could be the county, town or city hall)

Vertical land descriptions

define air rights, specify floor-to-ceiling sale of air lots in multistory condominiums or cooperatives (governed by horizontal property act), as well as subsurface rights for mining and drilling.

Sections

each township contains 36 one-mile squares or sections. Each of which is ordered and numbered. Four townships add up to a quadrant.

Land

earth's surface, subsurface to the center of the earth, the space overhead, and the rights to each. Rights: common rights in land; surface rights, subsurface rights, mineral rights, water rights, air rights.

Personal-use easement

easement in gross that is for personal use, when an owner lets a neighbor or friend cross the property as a shortcut or to get to a waterway. Not transferable, and terminate with the death of either party or sale of property.

Ingress, egress, regress

enter, exit, and reenter

Time share ownership

fee simple ownership of interval occupancy of specific unit, available to the owner at a specific time period each year.

Mechanic/Material-mans' liens priority

follows state specific rules for time limits on recording the lien, such as within one year of the project, as well as determination of the lien's effective date. Commonly, effective the date the work began, NOT the date of recording, represent an enforceable lien for a statutory period after recording, generally a year, unless satisfied or renewed.

Adverse possession

form of involuntary alienation. Actual title is transferred based on demonstrated use similar to that needed for a prescriptive easement's right to continue a specific use.

Lot and block

generally used for subdivisions, also called recorded plat system, that identifies according to a plat map. Or assessor's map (has disclaimer that is only used for taxes)

Rectangular survey

grid system that measures from the axis where a baseline, an east-west line, and a principle meridian, or north-south line, intersect.

Three commonly recognized physical characteristics of land

immobility, permanence (indestructibility), and uniqueness.

Freehold estate

implies fee simple, or absolute and complete ownership of real property. Key distinction: may/not include conditions on its use or transfer. May be called: fee, fee simply, fee simple absolute, estate in fee simple.

Easements

interest in land that gives a nonowner the right to use the property for a specific purpose, generally to cross over it. Distinguished as either appurtenant or in gross.

Real Property (realty)

land along with improvements, things attached to it, and the benefits, rights, and interests included in its ownership.

Property descriptions

may be legal; such as metes and bounds, lot and block, or rectangular survey or street address. Full legal description is required for a deed to be valid.

Sole ownership (tenancy in severalty)

means that an individual is the sole owner of the property

Encumbrances

monetary and non-monetary, represent a restriction on the use/transfer of real property. Three types: liens, easements, encroachments.

Lien

monetary encumbrance that asserts the lienholder has a creditor's claim to a specific monetary interest in the properties value. May be satisfied by the property owner through paying the debt. Can be voluntary (approved by and accepted by the owner) or involuntary (placed against owner's will; tax lien, judgement, claims for equity interest).

Creation and termination of easement

mutual agreement, necessity, longtime use, termination of easements, abandonment, release of easements, conclusion of the reason, merger of the dominant and servient estates.

Benchmarks

name for permanent markers, brass disks set in concrete or stone that identify marker's latitude, longitude, and elevation.

Mechanic's lien

nonpayment of claims by those who worked on a property, involuntary, specific liens

Monument

number of landmarks that provides a stable point of reference for surveys. They can be natural or artificial.

Fixtures

once-moveable items that have been attached to real property. Such as a sink, ceiling fan, coat screw.

Title

ownership and legal evidence of ownership; such as deed.

Concurrent ownership (co-ownership)

ownership by two or more parties at the same time

License

personal, revocable right or privilege granted by an owner to someone else to use the property in a brief, limited way. Verbal approval to change a trespasser into a visitor. NOT considered an easement, may/not include compensation.

Tangible (corporeal) property

physically touchable, material property, most notably land and its improvements

Datum

point, line, or surface from which elevations are measured; there are local and national datum for reference in establishing local and national benchmarks for surverys.

Tacking

principle by which a new owner may be able to claim a previous owner's period of similar adverse use to satisfy a statutory minimum-period requirement.

Judgement liens

result from a court order to pay a certain amount to a creditor; involuntary, general liens

Mortgage lien

result from property financing, voluntary and specific

Federal (IRS) tax liens

result from unpaid taxes; involuntary, general

Municipality property tax liens

result from unpaid taxes; involuntary, specific liens

Easement appurtenant

right to use property for the benefit of another one. Most common example is "right-of-way" across someone else's land to get to one that has no other access.

Three economic characteristics of land

scarcity, improvements, permanence of investment, and area preference.

Fee simple subject to a condition subsequent

should a stated condition occur, the grantor, heirs, or assigns must take action to exercise a right to terminate the estate under the power of termination, right of entry, or right of reentry.

Township

six mile by six mile squares, are identified by the township (north-south) and range (east-west) lines. Four townships add up to a quadrant.

Encroachments

special type of encumbrance, involves some form of overlapping use of one property by another. Ex: when a portion of a building passes into another's property (trespass) or a roofline extends across a property (nuisance). Legally: unauthorized, illegal infringements that can affect a title's marketability, but may arise and exist with the knowledge and consent of owners.

Easement by necessity

special, but common, type of appurtenant easement that arises automatically in cases where an owner sells a landlocked parcel of a larger property.

Joint tenancy with right of survivorship

specifically includes "with rights of survivorship" in the language of the deed. Sometimes abbreviated: JTWROS, or JTRS. "poor man's will"

Real Estate

synonymously used with real property; but includes real and personal property.

Dominant tenement/estate

the land that commands the benefits of the use created by an easement of necessity

Servient tenant/estate

the property that provides, and must allow, the access, since the property is a servant to the interest of the one that requires it

Easement in gross

there is only a servient tenement. Ex: utilities easement (pass-through) for sewer pipes and telephone lines do not benefit the utility company's physical property, so there is no neighboring dominant tenement. The servient tenement must allow access for maintenance and repairs.

Appurtenances

things that "belong" to something else, generally by attachment, includes a number of rights that "run with the land", which means rights that do not end when new owner takes title. Ex: gardens, buildings, certain easements (deeds of right of way).

Tenancy in common

undivided fractional interest in the property. Does not convey either the use or ownership into separate portions of the physical property. Each tenant may hold a deed that does not name any of the other owners.

Trade fixtures

used by business tenant. Display cases, supermarker freezers; the tenant's removeable personal property.

Property dedication

when a private entity owns a road or gathering place used by the public, that entity may publish a notice or block off private property one day a year to formally assert its continued right to do so.