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