Chapter 2 - Real estate interest and ownership
Joint Tenancy
A form of co-ownership that includes the right of survivorship.
Concurrent Ownership
A form of ownership where more than one person has an interest in the same property at the same time. Also called co-tenancy or concurrent ownership
Reversion
A future interest that becomes possessory when a temporary estate (such as a life estate) terminates, and that is held by the grantor (or grantor's successors in interest).
Net Lease
A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs. net = tenant
Estate at will
A lease that can be terminated by either party at will, without notice - No ending - Either party cancel at anytime with permission
Percentage Lease
A lease, commonly used for commercial property, whose rental is based on the tenant's gross sales at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount. art gallery example - some better months then others
Ordinary Life Estate (conventional)
A life estate whose duration is measured by the life of the life tenant.
Remainderman
A third party who has a future interest in property upon the termination of a life estate
Fee simple conditional
All rights, but revocable if specific condition is violated
Fee Simple Determinable
An estate which has been created to exist only until the occurrence or nonoccurrence of a particular event. Returns AUTOMATICALLY Terminated automatically if certain conditions occurs (think of church example. I give you church so long as it stays a church. if turned into bar, it automatically reverts back) Determinable = automatic
Fee Estate
An indefinite, exclusive and absolute ownership interest in a parcel of real estate, the largest bundle of rights to be held in real estate. inheritable highest form of ownership
Less then freehold estate
An interest held by tenants who rent or lease property. definite duration (lease agreement)
Life Estate
An interest in land that exists only for the duration of the life of some person, usually the holder of the estate.
Chattel Real
An interest, such as a leasehold, in an item of immoveable property, such as land or a building.
Periodic Tenancy
Any lease agreement that automatically renews each period until either party gives notice of termination Month to month - 30 days to cancel Week to week - 10 days to cx
What deed gives you 3 covenants and 0 warranty?
Bargain and sale
Granting Clause (Words of Conveyance)
Deed clause stating a grantor's intent to transfer an interest in real property. - fee simple: highest ownership possible - life estate: limited to duration of the life of its owner or designated person - easement: non - possessory use of property owned by someone else - In a discrepancy between a Habendum clause and a granting clause, the granting clause prevails
What 2 statutory life estates are not recognized in AZ?
Dower and curtesy
How can a lease be terminated?
Expiration Agreement Destruction Condemnation Merger
2 general classifications of estates:
Freehold and leasehold
Which deed gives you 3 covenants and 2 warranties?
General
Fee Simple on Condition Subsequent
Gives power of the grantor to take the property back if a certain condition occurs
Joe and Tom form a corporation. How do they take title?
In severalty
John Ted and Alice own property as joint tenants. Alice sells her share to Sam. What kind of ownership describes this property.
John and Ted remain Joint tenants and Sam (new owner) is a tenant in common.
Fee Tail Estate
Limits heirs to lineal descendants (blood relatives) - This is not legal in AZ
Estate for years
Nothing to do with years! - They have a specific beginning and end date For example) 30 days, june, july, aug, etc.
Remainderman
One entitled to receive a remainder interest in some estate sometime in the future.
Homestead Protection is what?
Only statutory life estate recognized in AZ. - The purpose is to protect a portion of the equity in the family home during the occupants lifetime from unforeseen personal judgements -Protects you from unforeseen judgements - $150,000 Max
Severalty Ownership
Owned by one person only. Sole ownership.
Freehold Estate
Ownership for an undetermined length of time
Freehold Estate
Ownership of indeterminate duration 2 types: fee estate and life estate
Grantee
Person receiving a grant of real property.
What is a homestead?
Primary residence, the equity in which is usually exempt from attachment by creditors to a statutorily preset amount.
Waste
Reduction in value caused by destruction, damage to property by someone in possession who holds less then a fee estate.
Index Lease
Rent payments are periodically adjusted based on an economic indicator, such as the consumer price index.
Bob and Bill bought an apt and took title as joint tenants. Bob died and left a will. Bill now owns the apt building in _____
Severalty (Joint tenants always has right of survivorship.)
Holdover Tenant
Someone who remains in the property after the lease has expired. WITHOUT PERMISSION -Estate in sufferance
Which deed gives you 3 covenants and 1 warranty?
Special
Which method of ownership is NOT legal in AZ?
Tenancy by the entirety - only for spouses and regards them together as one single legal person - treat it like Community Property with right of survivorship - Yes to survivorship, NO PROBATE (right of survivorship)
Estate at Sufferance
Tenant remains on the property, without the landlord's permission, after the lease has expired They are called a holdover tenant
Lessee
Tentant
Habendum Clause
That part of a deed beginning with the words "to have and to hold," following the granting clause and defining the extent of ownership the grantor is conveying. - reaffirms the extend of the ownership being transferred. - used only when limiting the interest conveyed, as when Grantors wish to convey something less than the estate they own. - In a discrepancy between a Habendum clause and a granting clause, the granting clause prevails - Granting clause affirms the grantor is giving up ownership and clarifies which type of interest is being conveyed.
Assignment
The act of transferring to another all or part of one's rights arising under a contract. - landlord consent req'd. - must honor the covenants in original lease - off hook now, new tenant responsible
Right of Survivorship
The characteristic of a joint tenancy by which the surviving joint tenant (owner) automatically takes all rights, title, and interest of the deceased joint tenant.
Curtesy
The fractional interest of a husband in the estate of his wife at the time of her death; illegal in Arizona
Probate
The judicial PROCESS of determining who are the rightful heirs.
A gross lease is one that:
The landlord pays for all operating expenses - net taxes, net insurance, net maintenance
Subletting
The leasing of premises by a lessee to a third party for part of the lessee's remaining term. still on hook if anything happens, name is still on lease
Fee Simple Absolute
The maximum possible estate one can possess in real property; also referred to as fee simple or fee. highest form of ownership indeterminable length of time includes bundle of rights is in heritable still subject to the four govt powers - PETE
Curtesy
The rights that a husband acquires in the wife's property upon her death.
Dower
The rights that a wife acquires in her husband's fee simple property.
Devise
Transfer of real property through a will
Grantor
a person transferring title to real property
Demise
a transfer of possession of property by a lease
Demise is:
a transfer of possession of property by a lease
Leashold Estate
an estate for a certain duration
Chattel real would best be defined as: a. Fee simple b. Devise c. Intestate d. Personal property
d. personal property
transfer of ownership is by a
deed
A fee simple property owner deeds title to the property to a church group as long as they run a battered women shelter on the property. The type of ownership interest held by the church group is a:
defeasible fee
3 Statutory life estate are:
dower, curtesy, and homestead protection - only Homestead legal in AZ
grantee
eeee - receiver
2 kinds of freehold estates:
fee estates and life estates
greatest posible interest
fee simple absolute
A person who holds the greatest ownership rights in the property that is allowed to by law owns a:
fee simple estate (Absolute)
life estate our autre vie
for the life of another
grantor
giv'or, do'or, mak'or
Conventional life estates are created by the actions of a:
grantor
Life tentant
holder of life estate
Waste
improper use or abuse of property
Inchoate
incomplete, as an interest in property, such as a lien that has been filed but not enforced. (Mechanics)
Lessor
landlord
transfer of possession is by a
lease
Puffing is best described as
legal exaggeration
Life Estate
limited to the time of the owner or the life of another designated person NOT inheritable BOTH free hold estates are possible bc of the allodial system of land ownership
Life estates are divided into the categories of:
ordinary (conventional) and statutory (legal)
Homestead protection protects against what?
personal or unforeseen judgements
Which of the following would be considered community property?
property bought by one of the parties DURING marriage. COMMUNITY PROP = MARRIAGE
Right of Reversion
property is returned from tenant to owner at the end of the lease
A father owns a house as a fee simple owner and gives his daughter a life in estate in the property with a provision that the property will pass to the son after her death. The son has a:
remainder interest
Graduated Lease
rent increases by a fixed amount over a specified period of time
Statute of Frauds
requires certain contracts to be in writing 1 year or less do not need to be in writing 1 year and a day have to be in writing to be enforceable
Amy grants property to Bill for the life of Charles. After the death of Charles, the property goes back to Amy. What does Amy have?
reversionary interest
In AZ, the state presumption is unless stated otherwise, that unmarried couples take title as:
tenants in common
Peggy and Paul own a parcel of land. Peggy owns 65% and Paul owns the reminder. How do they hold title?
tenants in common (unequal shares)
When defensible estate ends, title will pass by all the following except?
to a specific 3rd party. (Will pass to original grantor, grantor heirs, or by law of decent.)
A tentant and landlord agree on an oral lease for three years. This lease is:
unenforceable. (Anything over 1 year and day needs a contract to be enforceable)
Ground Lease (land lease)
where one person owns the land and another owns the improvements ex) restaurant on native american land
Death of landlord or sale of building:
will NOT terminate a lease
How much equity does the homestead exemption protect in a persons AZ residence?
150,000 Termination: 1. sale or transfer of property 2. Individual moves from Arizona 3. Abandonment (2 years or more) 4. Individual moves to another primary residence 5. renting out property. (HAS TO BE PRIMARY RESIDENCE) - DOES NOT COVER CORPORATIONS - Homestead is only statutory life estate recognized in AZ - purpose is to protect a portion of equity in family home agains unforeseen judgements, liens, or bankruptcy and may prevent the home from being sold out from under them. - does not protect against specific liens such as mortgages or property tax liens or mechanics lien - does not extend to land or any other properties owned. Only principle residence. - Does NOT cover corporations; residential only - Max is $150K per couple at one time