Chapter 1: Ownership Principles

General Partnership

All partners have to be general partners

Partition Action

Partition Action. When co-owners disagree on whether or not to sell a property, the one(s) desiring to sell can bring a partition suit against the one(s) blocking the sale. This provides a way for people to free themselves of an unwanted common ownership. It can be used to invite the court to dissolve a joint tenancy or tenancy in common. If the property cannot be physically divided without prejudice to the parties, the court could order the property to be sold.

Color of Title

"Color of title" is a phrase used in real estate to refer to title that may have the appearance of good and valid title to property, but in actuality, there is either no title or a vital defect in the title that makes it ineffective. Thus, by law, color of title fails to establish ownership in land.

Tenancy in Common (Form of Ownership)

1. Each owner has a full and undivided right of possession regardless of his percentage of ownership. This is the only unity of joint tenancy which applies in tenancy in common. 2. Owners can hold varying percentages of ownership. Interest must be stated in the deed or the law will presume that the owners each hold equal interest. 3. Ownership can be taken any time (does not have to be taken at the same time). 4. Each owner has his own deed. 5. There is no right of survivorship, and the future estate is determined by will, trust, probate, etc. 6. In most states, if two people are named on a deed with no indication of their being married, or of how they are taking title, the law will presume them to be tenants in common. 7. In selling a portion of ownership in a commercial investment project, all the owners own as tenants in common. This is defined in Utah law Page 3-2 © Stringham Real Estate School as an "undivided fractionalized long-term estate." In real life, it is commonly referred to as a "tenant-in-common interest."

Tenancy by the Entirety (Form of Ownership)

1. Its form is most nearly like joint tenancy, including the right of survivorship. 2. It pertains only to husband and wife. 3. The difference between this and joint tenancy is essentially that neither husband nor wife can sell, mortgage, or otherwise encumber the property without the agreement of the spouse.

Quiet Title Action

A lawsuit used to clear title or to make a claim of interest and have title legally transferred to the adverse possessor

Tacking

A legal process of combining the rights of adverse possession of two or more successive adverse possessors. For instance, Mr. A adversely possesses a property for four years. He subsequently transfers his rights of adverse possession to Mr. B. After three more years, Mr. B can establish his right of adverse possession through a Quiet Title Action. Mr. A would transfer those rights with a Quit Claim Deed.

Dedication

A method by which a person can give real property as a gift. It is sometimes called a private grant. Dedication allows for transfer of real property from a private individual to the public (government) or a special interest group (church). A. Voluntary dedication: Private individual gives real property as a gift for a park or church. The deeds often contain a clause specifying that the property must be used for the intended purpose or it reverts to the grantor, thus creating a defeasible fee. B. Statutory dedication: Usually involves the dedication of streets and roads to the city or county when getting approval to develop a subdivision.

Corporation

A person or persons joined for business purposes. 1. It creates a single, legal person, rather than a natural person (real person), regardless of how many officers or agents may be in the corporation. 2. It creates some protection for personal assets. 3. Ownership is held in the form of stock. 4. A legal person and a natural person may own property together only as tenants in common. A corporation taking ownership alone would take ownership in severalty.

Limited Partner

Financial liability extends only to the amount of his investment and he has no decision making power.

Survivorship

Full Right of Survivorship: If Jason and Janice own their home as Joint Tenants, when one of them dies, the survivor automatically and without probate becomes the owner in severalty.

Joint Tenancy (Form of Ownership) Continued

Full Right of Survivorship: If Jason and Janice own their home as Joint Tenants, when one of them dies, the survivor automatically and without probate becomes the owner in severalty. If Jason, Janice, and Jessica owned a property as joint tenants, each would own a one-third interest. If one of them died, the two survivors would automatically own a half interest, still as joint tenants. 3. One joint owner can sell his interest without the consent of other joint owners. If Jason, Janice and Jessica own as joint tenants and Jessica sold her interest to James, Jason and Janice would own two thirds as joint tenants and James would own one third as a tenant in common. 4. There can be any number of joint owners. 5. Joint tenancy takes precedence over a will. Joint tenancy takes effect "at death" while a will takes effect "after death." There is a legal instant between these two events causing the joint tenancy to take priority over the will. 6. Under Utah law, if a deed says: "John Doe and Mary Doe, husband and wife . . ." with no indication as to how they are taking title, the law assumes it to be joint tenancy

General Partner

Has full financial liability and full right of decision making authority

Community Property

It applies only to husband and wife. 2. It is used only in a few states: among them, California, Idaho, Arizona, Texas, New Mexico, Louisiana, Wisconsin, Washington and Nevada. 3. It is based on the concept that husband and wife are "equal partners" each owning a half interest in any property obtained during marriage. 4. In community property states, separate property is that which is acquired before marriage, after dissolution of the marriage, or by gift or inheritance during the marriage. It can be owned in severalty or with other partners and not include the spouse.

Voluntary Dedication

Private individual gives real property as a gift for a park or church. The deeds often contain a clause specifying that the property must be used for the intended purpose or it reverts to the grantor, thus creating a defeasible fee.

Joint Tenancy (Form of Ownership)

Requires that four unities be in place when the tenancy is created. If any of the unities are absent, joint tenancy cannot be created. The four unities (mnemonic = PITT) of joint tenancy are: a. Possession: Full and undivided rights of possession for all owners. b. Interest: Each of the owners hold an equal portion of ownership. c. Time: All grantees must become owners at the same time. d. Title: There is only one deed, but each owner has a copy of it.

Adverse Possession

The right of adverse possession is based on the concept that land is too valuable to be left unattended for long periods of time. A person can enter and possess unused property and, after meeting the requirements for the statutory period of time, obtain title. You cannot acquire government property through adverse possession

Limited Partership

There must be at least one or more general partners and there can be as many limited partners as desired.

Severalty

Title is held by only one person, all others have been "severed" from the title. All other forms of ownership are classified as co-ownership or concurrent ownership

How can one validate an Adverse Possession claim?

To make a valid claim of adverse possession of the property, the adverse possessor must be able to show that his possession was: 1. Open and Notorious: The owner or anyone else must be able to plainly detect the possession. 2. Continuous (not occasional): The owner uses it to the extent that any other owner would for the entire statutory period. 3. Hostile: This does not mean that the owner and the adverse possessor were fighting. It simply means that the adverse possessor is on the property without the owner's permission.. 4. Exclusive: The adverse possessor must act as though he owns the property, which is to say that he/she holds the land to the exclusion of the true owner. C. The ownership must be for the statutory period of time: 1. The statutory period ranges in the United States from three to 30 years 2. It is seven years in Utah. U.C.A. § 78B-214. 3. The adverse possessor is said to hold the property under color of title. D. In some states, as in Utah, the property taxes must be paid by the adverse possessor, not the legal owner, during the period of adverse possession. If the owner is paying the property taxes, the adverse possessor will not be able to obtain title by adverse possession.

Statutory Dedication

Usually involves the dedication of streets and roads to the city or county when getting approval to develop a subdivision.

Joint Venture

Where two or more parties combine to carry out a single business project.

Natural Person

natural person (real person)