Ch. 17 - Real Estate Syndicates and Real Estate Investment Trusts

Marita and Alexandria set up a Limited Partnership. Marita is named General Partner and Alexandria is named Limited Partner. Marita embezzles funds from the investors. Is Alexandria liable for Marita's indiscretion?

Alexandria is only liable if she was named General Partner in the certificate or if she participates in control of the business

What is the correct order of regulatory jurisdiction changes to non-corporate California Real Estate syndicate since the Real Estate Syndicate Acts inception in 1970?

The Department of Corporations, The California Department of Real Estate, The Department of Corporations

This form of syndication avoids double taxation but has a lack of centralized management. Which form fits the description?

The General Partnership and The Joint Venture

Alexandria and Marita's has qualified as a trust. It has distributed 96% of it income to its shareholders. Which earnings requires the payment of federal taxes?

The company only pays federal taxes on the retained earnings, which are taxed at corporate rates

A small group of investors are in the initial stages of putting together a real estate investment trust (REIT). Which of the following are qualifications?

The Company must distribute 85% or more of its income to its shareholders

This form of syndication allows limited liability for the investors but has negative tax features. Which form fits the description?

The Corporate Form

Alexandria and Marita are forming a Real Estate syndicate. They have their initial investments and are ready to proceed. What happens next?

Origination, Operation, Completion or Liquidation

This is the most frequently used organization form of Real Estate syndicates. Which form firms the description?

The Limited Partnership

Alexandria and Marita have formed an REIT. They have their investors and resources and are ready for business. The REIT will be investing in an assorted portfolio of real estate and mortgage investments. What type of REIT have Alexandria and Marita formed?

A Combination Trust

Marita tells Alexandria they must obtain their broker-dealer license from the Department of Corporations to engage in the sale of Real Estate syndicate of security interests. Alexandria disagrees with Marita, explaining they both have their broker license and that should be sufficient. Who is correct and why?

Alexandria is correct. Section 25206 was added to the Corporation Code making obtaining a broker-dealer license optional.