Chapter 7 Ownership of Real Property

community property with right of survivorship

"property that is community property and that has a right of survivorship. Upon the death of a spouse or registered domestic partner, community property with right of survivorship passes to the surviving spouse or domestic partner without probate."

Rights and Responsibilities of Joint Tenants

(access to the entire property, payment of taxes and other expenses, proportionate shares of income)

Terminating a Tenancy in Common

Agreement (A tenancy in common can be changed to another form of ownership, such as joint tenancy or tenancy by the entireties) partition action (is a court proceeding to settle a dispute between co-owners (joint tenants or tenants in common) about dividing their interests in real property.)

condominium

An individually owned housing unit in a building with several such units Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners."

Types of Separate (Non-Marital) Property

Assets acquired prior to marriage Property acquired by non-interspousal gift or inheritance Income derived from nonmarital assets Assets and property excluded by agreement

Right of Joint Tenants to Transfer Interest

Co-owners may sell their interest to a third party, give it away, or borrow money against it without the knowledge or permission of the other joint tenant or tenants. joint tenant may not will his or her share. pro: joint tenancy is that it avoids probate. Con: the property passes automatically outside of a will, even if the testator's wishes may have changed.

Terminating a Joint Tenancy

Joint tenancy is terminated when any one of the four unities ends, such as by sale, gift, or by mutual agreement.

Rights and Responsibilities of Tenants in Common

Obligation for Share of Expenses (tax, maintenance, insurance) Improvements to the Property. (not obligated) Leasing the Entire Property (right to a share of the rents in proportion to their ownership)

Community property (Excluded Property)

Property owned by either party before marriage Property acquired during marriage as a gift or an inheritance Income derived from separate property

Transferring Ownership

Sell his or her Share. Will his or her Share.

The Four Characteristics of Tenants in Common

Tenants in common may take title at different times. Tenants in common may take title on separate deeds. Tenants in common may have unequal interests. Tenants in common have an undivided interest or equal right of possession (one unity)

Corporation (cont.)

The ability to sue and be sued. An aggrieved person can use the courts to sue a corporation but rarely has the right to sue an employee of the corporation. The right to a common treasury. The corporation can buy, sell, own, and hold assets. The right to hire agents. The corporation has the right to hire employees and others to represent the corporation. The right to a common seal. The corporation has the right to obligate the corporation through contracts. The right to make by-laws. The corporation has the right to govern itself as long as that power does not violate the law. The right to issue transferable shares. The corporation can sell ownership of the company by offering shares that can be bought and sold in the open market. The right to ensure perpetual succession. The corporation can continue with or without any of its shareholders or employees. However, if the corporation terminates its existence, the shareholders are the last to receive any benefits. The right to vote for shareholders. The shareholders have the right to vote on the corporation's operating staff. The elected corporate officers will manage the affairs of the corporation on a day-to-day basis. The right of limited liability for its shareholders. The corporation is held responsible for any liabilities of the corporation unless the ownership has committed fraud.

Requirements for a Tenancy in Common

Unity (equality) for tenants in common is the equal right of possession or undivided interest. Undivided interest means that each cotenant has a certain equitable interest in the property (such as one-half interest or one-fourth interest) but has the right to use the whole property.

Required Unities of Joint Tenancy

Unity of time (created among all owners at the same time) Unity of title (acquired on the same deed) Unity of interest (equal as between or among all joint tenants) Unity possession (rights of use are co-equal) four unities—time, title, interest, and possession

Divorce

When the parties are going through a divorce (dissolution of the marriage), if they cannot agree upon a division of their property, the court will first determine whether the property separate property or community property. Any property purchased by one spouse alone usually is considered separate property. However, any property acquired with community funds, even if the title is in one name only, is considered community property regardless of how title is held.

Death of a spouse

When title is taken simply as community property, either party may will one-half of the community property.

Co-ownership

a fractional ownership interest that has several forms such as joint tenancy, tenancy in common, tenancy by the entireties, and community property.

Corporation

a separate legal entity apart from the owners (shareholders) of the corporation.

Common-interest developments (CIDs)

also known as common-interest communities, include condominiums, co-ops, planned developments, and other housing developments comprised of individually owned units, in addition to shared facilities and common areas

Tenancy

also refers to a mode or method of ownership or holding title to property.

Double taxation

business entity is taxed along with the owner of the business.

tenancy in common (TIC)

co-ownership in which two or more people own undivided interests in the property. The interests of the owners do not have to be equal.

common-interest development (CID)

combination of individually owned lots or units coupled with a shared interest in common elements.

timeshare

common ownership of a single piece of property by an association of people with each owner having the exclusive right to occupy a unit for a specified period each year.

partnership

consists of two or more people carrying on as co-owners of a business for profit.

cooperative

corporation holds title to all of the real property of the cooperative. Co-op owners do not have fee ownership in their unit and do not receive a deed. Instead, they purchase stock in the corporation that owns the property.

jointly and severally

creditors can go after each partner separately or all of them together.

Title vesting

evidence that the owner of land is in lawful possession; it is the proof of ownership. The title vesting appears on the deed and on the mortgage or deed of trust.

sole proprietorship

form of business in which an individual owns the business with no other owners

Tenancy by the entirety

form of ownership by husband and wife, where each owns the entire property. In the event of the death of one, the survivor owns the property without probate. Both spouses have an equal, undivided interest in the whole property.

limited partnership

has at least one general partner and one or more limited partners. Limited partners contribute funds into the partnership but have no additional liability beyond the contribution. Unlike general partners, limited partners have no right to control the daily affairs of the company.

general partners

have equal management and control over the business' day-to-day affairs, according to the terms of a partnership agreement.

joint tenancy with right of survivorship,

if one of the joint tenants dies, the surviving joint tenant automatically becomes sole owner of the property.

Business ownership

is a fractional ownership interest that has several forms. The most common types of business entities include sole proprietorships, partnerships, corporations, and limited liability companies.

undivided interest

is an interest held under the same title by two or more people whether their rights are equal or unequal in value or quantity. Undivided interests include fractional ownership interests, common interest developments, and time-shares.

Limited Liability Partnership

liability protection to individual partners in a partnership liabilities or lawsuits that are the result of the activities of other partners, employees, or agents of the partnership. business entity that combines the tax advantages of a partnership and the limited liability of a corporation but does not require any advanced financial reporting or the complicated structuring that a corporation normally requires

Tenancy

mode or method of ownership or holding title to property.

intestate succession

no will.

Concurrent Ownership

ownership of real property by more than one person who holds title jointly and severally. ex. Tenancy in common Joint tenancy Tenancy by the entireties Community property

time-share estate or interval ownerships,

ownership or leasehold estate in property devoted to a time-share fee or a time-share lease.

condominium unit

physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described in the Declaration, including the unit's identifying number.

planned development

planning and zoning term describing land not subject to conventional zoning requirements. A planned development is a development of clustered single-family detached residences, townhouses, garden apartments, and other types of residences, with ample open space, community recreational facilities, and sometimes local shopping and employment centers.

Common elements

portions of a CID or condominium other than the units.

marital property.

property (real or personal) purchased or otherwise acquired during the marriage It does not matter if the property or asset was acquired by one or both spouses.

ownership in severalty

property is owned by one person or a single corporation

Non-marital property, separate property

property that is not included in the marital estate and is thus not subject to division by the court in the event of a divorce.

proprietary lease.

shares of stock give the co-op owners the exclusive right to occupy a particular unit under a

general partnership

two or more individuals or businesses join to operate a business for profit.

Community property

unique form of co-ownership that can exist only between spouses. property acquired by spouses during a valid marriage—except for certain separate property—is

Fractional Ownership

when two or more people or entities own property at the same time with undivided use. most common with a married couple that shares ownership in the family home. co-ownership, business ownership