Chapter 3 Real Estate

Uses of Real Property

(1) Residential, (2) Commercial, (3) Industrial, (4) Vacant Land (5) Special Purpose

Joint Venture

A business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity.

Joint Tenancy

A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.

LLC (Limited Liability Company)

A hybrid of an S corporation and a C corporation (regular). It is predominantly used to protect a company's assets from liability.

Ownership of real property by a married couple in which interests cannot be transferred without the consent of the other spouse is known as ___ A. Tenancy by the Entirety B. Tenancy in Common C. Estate in Severalty D. Joint Tenancy

A. Tenancy by the Entirety

Fee Simple Estate

Absolute ownership with all the rights associated with ownership of real property.

Freehold Estate

An estate in real property (whole bundle of sticks) which continues for an indefinite period of time.

Tenancy in Common

An ownership of real property by two or more persons, each of whom has an undivided interest, without the "right of survivorship"

Act of Waste

Describes a cause of action that can be brought in court to address a change in condition of a property brought about by a current tenant that damages or destroys the value of that property.

Unities of Interest, Possession, Time and Title

Describes the conditions that must exist in order for certain kinds of property interests to be created. In order for two or more people to own property as joint tenants with right of survivorship, or for a married couple to own property as tenants by the entirety, they must have the four unities (Interest, Possession, Time, and Title)

Trade Fixture

Fixtures and equipment that may be attached to a building during a tenant's occupancy, with the intention that they be removed when the tenant leaves. But it is under the possession of the landlord.

Condominium

Generally sells at a higher price per square foot since it comes with the full bundle of rights.

Estate at Will

It does not have a term or periodic specification it is just a tenancy at the will of the person.

LLC tax advantage

LLC can serve as a pass-through tax entity, meaning any profits earned by the company are passed through the LLC and paid at the personal level.

Periodic Estate

Month to month/30 day tenant.

Leasehold Estate

Ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord.

Joint Tenancy

Ownership of real property by two or more persons, each of whom has an undivided interest with the "right of survivorship".

Subsurface Rights

Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.

Trustor

Person who creates a trust and conveys title to trustee.

Chattel

Personal property, such as household goods.

Personal Property

Possessions such as jewelry, furniture, and paintings. They can be moved from a commercial building.

Real Property

Real Estate + Bundle of Rights

Right of Survivorship

Right of the surviving joint owner to succeed to the interests of the deceased joint owner, distinguishing feature of a joint tenancy or tenancy by entirety.

Air Rights

Rights in real property to use the space above the surface of the land. (Building sq. footage, views, cell towers, etc.)

Riparian Rights

River = Flowing water The right of a property owner whose land borders a natural water course such as a river, to reasonable use and enjoyment.

Life Estate

The conveyance of title property for the specific duration of the life of the grantee. It could be 10, 15, 20 years. Least bundle of sticks. You do not have fee simple rights.

Partition

The division which is made of real property between those who own it in undivided shares.

Undivided Interest

The interest in property owned by tenants whereby each tenant has an equal right to enjoy the entire property.

Reversionary Interest

The interest which a grantor has in lands or other property upon the termination of the preceding estate.

Dower

The part of or interest in real estate of a deceased husband given by law to his widow during her life.

Remainderman

The person who is to receive the property after the termination of the prior estate. They would get the fee simple.

Bundles of Rights

The premise that the ownership of real estate consists of the ownership of various rights associated with it. These rights include the right to use and/or occupy, the right to sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the foregoing.

Escheat

The reversion to the State of property in event the owner thereof abandons it or dies, without leaving a will and has no distributees to whom the property may pass by lawful descent.

The deed's bundle of rights (Fee simple) is stronger than the contract rights.

true

An ownership of realty by two or more persons, each of whom has an undivided interest, without the "right of survivorship" is known as___ A. Tenancy by the Entirety B. Tenancy in Common C. Estate in Severalty D. Joint Tenancy

B. Tenancy in Common

An estate which the tenant holds his own right, without being joined in interest with any other person is known as___ A. Tenancy by the Entirety B. Tenancy in Common C. Estate in Severalty D. Joint Tenancy

C. Estate in Severalty

Ownership of realty by two or more persons, each of whom has an undivided interest with the "right of survivorship" is known as ___ A. Tenancy by the Entirety B. Tenancy in Common C. Estate in Severalty D. Joint Tenancy

D. Joint Tenancy

Littoral Right

Lake = Still Water The right to land bordering on the shore of a sea, ocean, or lake to reasonable use and enjoyment.

Tenancy in Common

Ownership of real property by two or more people, each of whom has an undivided interest, without the 'right of survivorship'

Special Purpose Real Estate

Property that is appropriate for one type of use or limited use. This type of property has unique design or layout, uses special construction materials, or other features that limit the property's utility for purposes other than the one for which it was built. For example, a church, theater, or school.

Land Rights

Subsurface rights (minerals, oil/neutral gas, aquifers, etc.) Air rights Riparian rights (water rights) Littoral rights

Fee Simple Defeasible

The owner f=of the property holds a fee simple title contingent upon certain conditions/restrictions. (Less bundle of sticks)

Banks typically lend money to an irrevocable trust, where one can transfer the full title and rights to the trustee

false

Cooperative

is a corporation. You have the right to live there, a stock certificate (not for real property). Generally sells less per square foot since it comes with a limited bundle of rights.

If one of the owners in a 'joint tenancy' dies, their share of ownership is distributed to the other joint tenants. not the estate of the deceases.

true