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Wk 6 Property
Property Week 6
| Question | Answer |
|---|---|
| Real Property | Defined: land, buildings, and anything permanently annexed or affixed to land or buildings Problem area: fixtures – property which starts out as personal property but which becomes so affixed to real property that it becomes part of the realty |
| Fee Simple | The greatest degree / highest quality of ownership of real estate Unlimited in use and unlimited in time Fee Simple gives the owner right to sell propertyOwnership interest passes to heirs upon death of the owner |
| Leasehold | Ownership which is limited in time by a term of years, months, or weeks and unlimited in use (unless limited by agreement of landlord and tenant) |
| Easements | Ownership which usually is not limited in time but is severely limited in use (i.e., includes a right to drive across, pass wires and pipes across, etc.) |
| Life Estate | Ownership which is limited in time by a person's life (i.e., no power over it at death) but virtually unlimited in the right to use (but life tenant cannot commit waste) |
| Forms of Co-Ownership | Tenancy in common: • Freely transferable • Passes to heirs upon death of the owner |
| Joint Tenancy | Free transferability Rights of survivor ship-does not pass to heirs upon death of owner |
| Joint Tenants | If A, B, and C own property as joint tenants then you can safely assume: A. 1/3; B. 1/3; C. 1/3. To be joint tenants: 1. Must own an equal fractional share 2. Must have all purchased at the same time and from the same seller |
| Joint Tenants cont... | If A dies, B and C would own 50% eachA's heirs would inherit nothing. Upon A's death because of the right of survivor ship unique to joint tenancy, B and C would own a greater fractional share. |
| Joint Tenants (continued) | Rather than A dying on the exam, he may sell his 1/3 interest to D, even without the consent of B and C |
| Joint Tenants (continued) | Result: B 1/3 still a joint tenant with C C 1/3 still a joint tenant with B. If B or C died at this point, the one who survives would own 2/3D is a tenant in common, If D dies, D's heirs inherit D's 1/3 |
| Acquisition of Real Estate | • Purchase and sale (deed) • Gift • Adverse possession • Will or descent • Government action |
| Adverse Possession | • NOT created by deed. Five requirements: continuous, hostile, adverse, open, statutory period. • Adverse possession results in full ownership rights (usually the wrong answer choice) |
| Deeds – General Requirements | • Signed by grantor (seller) • Contain description of the property • Names of grantor, grantee • Delivery of deed to grantee |
| Recordation | • Not necessary to validate deed • Necessary for protection against bonafide purchasers (or lenders) for value |
| Types of Deeds | • General warranty deed: includes full warranties • Special warranty: similar to general warranty deed except the warranties are limited to defects which occurred during the time grantor owned the property • Quitclaim: no warranties as to title |
| The Race to the Courthouse to Record a Deed or Mortgage | The exam will ask, "which deed has priority" – Race/notice: first to record without notice |
| Sale of Mortgaged Property | • I. Buyer assumes seller's mortgage • II. Buyer becomes personally liable for mortgage payments. • III. If Buyer defaults, creditor will foreclose and could sue buyer or seller for any deficiency. |
| II. Subject to the Mortgage | buyer probably tried to qualify for the mortgage but could not. The buyer has to make his payments directly to the seller who will "hopefully" send the money on to the mortgage company... |
| II. Subject to the Mortgage | upon default and later foreclosure, the buyer has no personal liability since he never assumed mortgage but buyer would still be booted out upon foreclosure. |
| Novation | A substitution of debtors with creditor's consent. Buyer becomes liable and creditor releases seller from any liability. |
| Requirements for Residential Lease | 1. State the term of the lease, describe the leased premises and state the amount of rent. A lease does not have to contain a due date for the payment of rent. If no due date is mentioned, all the rent is due at the end of the lease. |
| Leases – Assignment | New tenant (assignee) is substituted in place of original tenant-both still obligated to the landlord |
| Leases - Subleases | new tenant takes place of old tenant for a short period of time, old tenant reserves rights to move back in |
| Personal Property | Includes anything not real, such as goods discussed in UCC Sales, and Intellectual Property such as copyrights, patents, trademarks |
| Intellectual Property | • Copyrights: protection for original works; Individuals: for natural life plus 70 years, Corporations: 95 years • Patents: protection for inventions; 20-year protection • Trademarks (distinctive words, name, symbol, or product shape) |
| Insurable Interest | Relationship which must exist between the insured and the risk covered whereby the insured stands to suffer some legally recognizable loss or injury. |
| Insurable Interest – Property Insurance | Property (fire/casualty) insurance: insurable interest must exist at time loss incurred • One can have an insurable interest by virtue of: – Ownership – Leasehold interest – Future interest – Secured creditor including mortgagee – Contract pur |
| Co-Insurance | To require certain minimum coverage to permit full recovery. Certain percentage of the value of the insured property must be covered at the time of the loss (usually 80%), otherwise recovery for partial losses will be determined by co-insurance formula |
| Co-insurance formula | (insurance carried/amount supposed to carry-i.e.,FMV × 80%) × loss = recovery |
| Mortgage | • Mortgage-Debt secured by real estate • If more than one mortgage is given by an owner of real estate, which mortgage holder has priority, same rules as deeds! |
Created by:
booklvr2004
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