Ownership of property

Ron sells his old house. He and wife Deb take title to a new house. The deed does not indicate this ownership specifically as a tenancy by the entirety, however. What percentage of the interest in the new house does Deb own?

100% - Legally, Ron and Deb are a single entity and each owns 100% of the property.

Mary, Donna, Ralph, and Lou co-own a property as joint tenants. What is Ralph's interest in the property?

25%

Mary, Donna, Ralph, and Lou co-own a property as joint tenants. Ralph dies. What is Mary's interest in the property?

33 1/3%

Karen and her sister Sue buy a $200,000 house together. Karen puts up $150,000, and Sue puts up $50,000. The deed simply indicates that the grantees are Karen and Sue as tenants in common. Sue's interest in the house is MOST LIKELY

50%. - Unless specifically stated in the deed, the interests are generally assumed to be divided equally among all co-owners, which means that Sue would have a 50% interest although she put up only 25% of the money to buy the house.

How long does a condo purchaser have to exercise his right to cancel the purchase contract?

7 days

Purchaser's Right to Cancel

A buyer purchasing a new unit from a developer has an absolute right to cancel the purchase contract for any reason without penalty within seven (7) calendar days of signing the contract. A purchaser cannot be penalized for canceling the contract within those seven days and is entitled to a refund of any monies deposited. Title cannot be completed until the buyer's cancellation period has expired. This requirement does not apply to the resale of units.

Right of Survivorship

A characteristic of statutory survivorship tenancy, joint tenancy, and tenancy by the entirety; surviving co-tenants automatically acquire a deceased co-tenant's interest in the property.

Undivided Interest

A co-tenant's interest, giving him the right to possession of the whole property, rather than a particular section of it.

Joint Tenancy

A form of co-ownership in which the co-owners have equal undivided interests and the right of survivorship. Requires the unities of time, title, interest, and possession.

Tenancy in Common

A form of co-ownership in which two or more persons each have an undivided interest in the entire property (unity of possession), but no right of survivorship.

Tenancy by Entirety

A form of property co-ownership by legally married spouses, in which each spouse has an undivided one-half interest without the other's consent.

Unity of Person

Both co-owners considered being a single legal entity. Applies only to married couples and is necessary for tenancy by the entirety.

Public Offering Statement

Condominium developers must provide prospective purchasers of a new unit a copy of a public offering statement before a purchase contract is finalized and signed. The Act requires that the public offering statement must disclose information required by law about the condominium, including the purchaser's right to cancel the contract. Note that the public offering statement requirement applies only to new sales, not resales of units.

Ownership Options

Deed, such as when someone sells a house to someone else. Devise, such as when real property is transferred after the owner's death under provisions of a will. Descent, such as when someone dies without a will and the state's statute of descent determines who owns the real property.

Unity of Time

Each co-owner acquiring title at the same time.

Unity of Title

Each co-owner acquiring title through the same instrument (deed, will, or court order).

Unity of Possession

Each co-owner being equally entitled to possession of the entire property, because the ownership interests are undivided.

Bride Deb moves into the house Ron owned prior to the wedding. The unities that are present with respect to the ownership of the house are interest, time, and title only, not possession or person.

False

Marcia, Jan, and Cindy own a 12-acre lot as joint tenants. They agree to partition the lot into three separate lots. Now each woman owns an undivided interest in four acres.

False

Opal lives in a co-op, and she does not pay her the required assessment. The other owners in the co-op can put a lien on her unit.

False

Ron and Deb just got married, and Deb moves into the house Ron owned prior to the wedding. Ron and Deb automatically own the house as tenants by the entirety.

False

All persons selling (or attempting to sell) time-shares in North Carolina must have an active, valid real estate license as well as a separate time-share license.

False - All persons selling (or attempting to sell) time-shares in North Carolina must have an active, valid real estate license; however, there is no separate time-share license.

Opal lives in a co-op. Since her interest in the co-op is personal property, she cannot deduct real estate taxes and loan interest from her federal income tax.

False - Cooperatives are a shared form of ownership, so shareholders can deduct from their federal income tax their proportionate share of the real estate taxes and interest paid by the corporation. Even though her interest is personal property, it's taxed as though it's real property.

Lara owns a condominium. When a candle catches her draperies on fire, the damage to Lara's carpet, walls, and furniture is covered by the condominium association's hazard and liability insurance.

False - you have to get your own insurance to cover the furniture and interior of your condominium

Homeowners Association (HOA)

Has a membership that is comprised of the unit owners. Usually elects a board of directors. Enforces the bylaws and CC&Rs established by the condominium sponsors. Manages the operation of a condominium, imposing assessments to pay for major projects or unexpected emergencies, and arranging for the maintenance of the common areas, usually by a property management company.

In a tenancy by the entirety, neither spouse may individually:

Individually sever the concurrent ownership Individually transfer his or her interest or eliminate the other spouse's right of survivorship Sue for partition of the property Both spouses may consent to convey or transfer any interest in the property. Neither party has the right of partition.

3 of 3Karen and Sue's deed indicates that Karen owns a 75% interest, and Sue owns a 25% interest. Which unity is NOT present in this arrangement?

Interest

Ann and Bob each own a one-third interest in a property as joint tenants. Dave owns a one-third interest in the property as a tenant in common with Ann and Bob. When Bob dies, what happens to his interest in the property?

It goes to Ann, who now has a two-thirds interest.

ways of termination in Tenancy by the entirety

One spouse or partner dies, at which point the surviving spouse or partner becomes an owner in severaltywithout going through probate. Mutual agreement—both parties agree to end this type of ownership and both sign a new deed. The couple gets divorced but keeps the property, at which point they own the property as tenants in common.

Opal lives in an apartment that is going co-op. The current residents are given the first option to buy in, and Opal decides to take advantage of the opportunity. Which statement about Opal's new co-op is FALSE?

Opal will own the airspace inside her co-op.

In some states, including North Carolina, a person who is part of a legal couple can own property independently of his status, assuming that only he holds the title. Separate property, also known as non-marital property, may be property that was:

Owned prior to the marriage or legal civil union, or Given or devised by will only to one spouse or partner during the term of the marriage or civil union.

Ownership can be divided into two primary forms:

Ownership in severalty, where property is held by one person or entity Concurrent, where the property is held by two or more persons or entities

PITTsburgh

Pa: Possession, Interest, Time, Title, and Person.

Lenny and Eileen just got married, and she moves into the house Lenny owned in severalty prior to the wedding. Which of these unities is present concerning the ownership of the house?

Person

Which of these unities is NOT required for there to be joint tenancy?

Person

Which of these unities is required for there to be a tenancy in common?

Possession

Resale Certificate

Resales of a condominium built after October 1, 1986, require the owner to provide a resale certificate to a prospective purchaser prior to closing. This certificate discloses common area expense assessments and any other fees that are expected to be paid by unit owners. A purchaser of a resale unit does not have a cancellation right nor is a public offering statement required.

Karen and Sue buy a $200,000 house together. Karen puts up $150,000, and Sue puts up $50,000. The deed indicates that Karen owns a 75% interest, and Sue owns a 25% interest. How much of that property can Sue occupy?

Sue can occupy 100% of the property, even though she has only a 25% interest in the property. Co-ownership involves an undivided interest in the property.

Tenancy in Common

Tenancy in common is the most common form of co-ownership. The co-owners are referred to as "tenants in common." This is a form of co-ownership in which two or more persons have an undivided interest in the entire land, but no right of survivorship. Therefore, when a tenant in common dies, his interest in the property passes to his heirs (or state intestacy laws if no will exists). The deceased co-owner's interest will not automatically pass to the surviving co-owners.

Common areas could include the following:

The exterior of the condominium building(s) The grounds and landscaping Lobbies, hallways, stairways, and elevators (if shared space) Streets, sidewalks, and parking lots within the development (if not public streets) Laundry facilities Recreational facilities such as a swimming pool, gym, or party house

The North Carolina Condominium Act of 1986 is one of the horizontal state laws that set forth the requirements for the creation, restrictions, management, and the sale of condos. The declaration must include:

The purpose of the condominium; a legal description of the property; a plat with building locations, plans and physical building specifications; and degree of ownership of common area available to each unit. Covenants, conditions and restrictions (CC&Rs) of the property will "run with the land," meaning that any sale of a unit will be subject to the same rules, covenants, conditions, and restrictions. The purpose of CC&Rs is to keep the community attractive and uniform and to protect its market value. Articles to establish an association to provide maintenance and management of the common areas, as well as how officers are elected.

Time-Shares

The use of the unit may or may not be transferable to another party, depending on the language in the contract. As part of the timeshare agreement, the timeshare owner may also pay an annual fee that covers expenses such as maintenance, management, maid service, utilities, linens, etc.

Warranties.

To protect purchasers and their investment, the law of implied warranty applies in the purchase of a condominium which guarantees that the unit is constructed in a workmanlike manner and that the premises are free from defects. It ensures that the unit is usable for the purpose sold unless there is an agreement stating otherwise and that is it specifically disclaimed in a manner to make the warranty void.

Townhomes

Townhomes are properties developed for co-ownership where each co-owner has a separate fee simple interest in an individual unit, including: Its roof, The basement, The ground directly beneath the unit, Patio space, and An undivided interest in the common areas of the property.

A co-op owner's shares are considered personal property. This differs from a condominium purchase, which is a fee simple transaction where the unit owner receives a deed to the property. There are no individual deeds for co-op unit owners.

True

Association fees are also used to purchase hazard and liability insurance for the common areas of the property and the exteriors of the structures. Individual unit owners are responsible for purchasing insurance that covers only the interior of their unit and their personal property.

True

Condominium bylaws may stipulate what color decorative lights an owner can use on a condo's exterior.

True

Cooperative owners receive a deed to the unit of their real property.

True

If property is otherwise acquired during the marriage or civil union, it is generally considered to be marital property, regardless of whether one or both individuals hold title. Such property is considered to be joint property as long as the marriage exists.

True

If title is severable between co-tenants, then title is a tenancy in common.

True

Other states recognize community property law, which says that two people in a marriage are equal but separate partners. Any property—real or personal—acquired during the marriage is owned equally. So, in the event of a divorce, the property is divided equally. North Carolina does not recognize community property.

True

Ownership in a joint tenancy cannot be willed or inherited; it can only be conveyed through deed

True

Property taxes are levied against each unit separately.

True

Residents of co-ops are shareholders who receive a long-term proprietary lease giving them exclusive possession of an individual unit and the right to use common areas for the life of the cooperation.

True

The word condominium means joint dominion or joint ownership. The purchaser receives a fee simple title to an apartment and is co-owners as tenants in common (without right of partition) in the common areas, such as the corridors, parking areas, grounds, and recreational facilities.

True

True or false: Any joint tenant may choose to sell his/her interest in the property without the consent of the other joint tenants. However, the sale violates the requirement of unity of time, interest, title, and possession so the joint tenancy is terminated at that point. Where there are only two joint tenants, the joint tenancy will be converted into a tenancy in common without survivorship if one of the two joint tenants transfers his/her interest to another person.

True

True or false: If a married couple chooses to hold property as tenants in common or joint tenants, North Carolina law allows for this as long as the conveyance or will clearly state the alternate form of concurrent ownership to defeat the presumption of tenancy by the entirety.

True

True or false: In North Carolina, the creation of joint tenancy with right of survivorship must be explicitly stated in the deed, for example: "Jane and Jack, as joint tenants with right of survivorship and not as tenants in common..." If the keywords "with right of survivorship" are omitted and the deed is merely to the grantees as "joint tenants," then only a tenancy in common is created under North Carolina law with no survivorship feature.

True

True or false: Tenancy in common can be created and conveyed both through deed or devise. It could be created through operation of law, such as when a married couple divorce but remains in a co-ownership.

True

True or false: Tenancy in common is the only co-ownership that can be owned in unequal fractional portions (one tenant could own 90% undivided interest and the other a 10% undivided interest). If the deed does not specify the amount of interest each holds, their interest will be considered equal. Each co-owner must pay taxes based on his/her interest.

True

When a joint tenant conveys his interest through a deed, the new co-owner is a tenant in common concerning the other co-owners, and the right of survivorship in that specific interest ends.

True

co-ownership distinctions refer to the owners' interest in the property, not the property itself.

True

The presence of several conditions, known as unities, defines the form of co-ownership:

Unity of Possession. All co-owners hold the same undivided right to possess the whole property (as opposed to a designated portion of that property). Unity of Interest. All co-owners hold equal ownership interests. Unity of Time. All co-owners acquired their interests at the same time. Unity of Title. All co-owners acquired their interests by the same deed or will.

Does joint tenancy require interest, time, possession and title?

Yes

Jessica sells her condominium unit to Roger. Does Roger also get an undivided interest in common areas and membership in the owners association?

Yes

Townhome owners have a fee simple interest in all of the following EXCEPT:

airspace - In townhome ownership, the fee simple interest includes roof, basement, patio space, the land beneath the footprint of the dwelling, and an undivided interest in the common areas of the property so the owner owns the unit in severalty. This differs from condominium ownership, where the fee simple interest is in the airspace only.

Parties to a joint tenancy or a tenancy in common have the right of partition, which allows

any co-owner to end the co-ownership. A voluntary partition can be implemented where both parties agree to end the joint venture and divide the property so each owns a piece in severalty, if it can be done equitably.

Brad and George are an unmarried couple who decide to buy a vacation home together. Brad puts up 60% of the money, and George puts up 40%. At closing, the deed simply lists Brad and George as the new owners. How did they take title, and what is their ownership interest?

as tenants in common, with 50% for Brad and 50% for George

Concurrent ownership

co-ownership or joint tenancy, is any form of ownership where two or more persons or legal entities share title to real property, with each person having an undivided interest in the property.

Common Interest Community Ownership properties include

condominiums, cooperatives, townhouses, time-shares, and planned community ownership

Joint tenancy exists when

each co-owner has an equal undivided interest in the land and right of survivorship. Joint tenancy requires the four unities of possession, interest, time, and title.

Trust

fiduciary arrangement that allows the owner of property (often real property), known as the trustor, to transfer ownership to someone else, the trustee, for them to manage the property for a third party, the beneficiary.

Tenancy by the entirety

is a form of concurrent or co-ownership that involves only owners who are legal spouses or partners with each having an equal and undivided share of the property.

severalty

lso known as tenancy in severalty, is the simplest form of ownership. It is a sole form of ownership, meaning that only one person or legal entity—such as a corporation—holds the title to that property.

Lisa owns a condo, which means she owns in severalty, the interior

of her unit only. If Lisa is the sole owner of her condo, she owns only the interior of her unit in severalty. Her interest in the common elements is as a tenant in common.

Opal lives in a co-op. Her interest in the co-op is

personal property

Tenancy by the entirety requires all five unities

possession, interest, time, title, and person since spouses and legal partners are considered a single, indivisible, legal person.

Larry owns his house in severalty. He has a will that leaves the house to his grandson, Sean. When Larry dies, Sean is ________ and his interest was created by ________.

sole owner / devise

Condominiums

structured (physically and legally) to combine individual ownership with co-ownership, with each co-owner having a separate airspace interest in an individual unit, combined with a shared, undivided interest in the common areas. Condos are considered real property and owners hold a fee simple title (deed) to the interior space of their individual condo unit.

what tenancy allows ownership in unequal proportions

tenancy in common

Pam and Jim are getting divorced and decide to sell their house. Before the house sells, however, the divorce is finalized, and the judge awards the house to Jim as part of the divorce settlement. What is his interest in the house?

tenant in severalty

right of survivorship

the property passes automatically to other co-owners when one co-owner dies.

Joint tenancy may be terminated by the example just mentioned (termination of one of the unities) or by:

voluntary agreement of the co-owners partition suit between co-owners. Though used infrequently in North Carolina, joint tenancy is widely used in many other states and is therefore tested on the national exam section.