Real Estate Principles
UNL Finance 382
Chapter 4

Real Estate Principles, 11th Ed., Charles J. Jacobus
	© 2010 by Cengage Learning

Forms of Ownership

Ownership of real estate is about the ownership of R                   . Real estate can be owned by O             P                or by two or more or by some entity.

Ownership by one personal is called Ownership in S                        by two or more persons as C                        or as C                              .

An entity may own real estate as well.

Sole Ownership

Ownership in severalty means that it is owned by one person or entity.  The interest that a person/entity holds is S                      from other’s interests.  This form of ownership offers the greatest amount of F                           in decision making and control, it also demands a higher amount of responsibility.  Upon death, the heirs or devisees of the owner I                         the property.

Cotenancy (Concurrent) Options 

There are essentially three types of cotenancy which exist between two or more owners of real estate.   Joint owners need to plan:
	Payment of expenses
	Management and decision making
	What happens when an owner dies (succession planning)
1.	Tenancy in Common: 
	a) Two or more person each hold an U                   I            in the real estate. 
b)  Each owner has the U                  of P                              . No co-owner can E                    the other from the property. No owner can claim a S                            portion of the property.
c) Ownership may be U                           shares.  If the conveyance is silent the law assumes equal ownership.
d) There is no right of  S                               between the owners except as may exist by the law of intestacy.
e) Each owner is entitled to share in the profits from the property and has the obligation to C                     to the payment of expenses and taxes in proportion to their ownership shares.
f) Created by using the phrase:	
	g) Nebraska presumes tenancy in common if not stated on conveyance. 
	
Joint Tenancy

In order for co-owners to hold title to property as Joint Tenants they must have the  U                    of:
	Possession:		
	Interest:	
	Time:	
	Title:	
a) Joint tenancy offers owners the R                    of S                             which means that ownership passes to the surviving owner upon death of one of the joint tenants.
b) Title transfers without regard to the law of intestacy or a will.
c) Joint tenancy is severed if one of the joint tenants conveys their interest to another.
d) Joint tenancy is not available to E                          because they may have  P                      D                    
e) Clear I                               to create a joint tenancy must be expressed in the conveyance such as:	
	f) Occasionally referred to as the “poor man’s will”

Married Persons

Married persons have three other options available in some states:
Tenancy by the Entirety: similar to Joint Tenancy except you add the unity of the P                 or B                  (Note not allowed in Nebraska)
	Community Property:
	Separate Property:

Community Property

Spouses are treated as equal P                         each owning a one half interest in all property acquired during the marriage rather then the spouses owning an undivided interest in all property.  Nebraska does not have Community Property.

Separate Property

In community property states, property held prior to marriage is separate property.  The conveyance does not need the spouse’s signature to convey the pproperty. The person who brought the property into the marriage does not need spouse’s permission.

Partnerships

Partnerships are an E                   under common law, unlike other entities which are creatures of statutory law.  Each partner is jointly and severally L                       for the debts of the partnership.  General partnerships are generally favored over corporations because taxes “pass through” to the partners rather than being taxed first at the corporate level, then again when income is paid to the shareholders.  In order to limit the liability that the partners have, states have created Limited Partnerships, consisting of a G                      partner and one or more L                     Partners. 

Other Entities

Joint Ventures, a type of partnership.
Corporations: C Corp and S Corp
Trusts: Inter vivos or L               Trusts, Land Trusts and REIT
Limited Liability Companies and Syndicates

Cotenancy of Condominiums and Cooperatives

Condominiums: common elements are owned by all owners
Cooperatives: Owners own stock in the corporation which owns the project.

Warning to Agents

Real estate agents can find themselves practicing law without a license.  This is a criminal act which can result in spending time in county jail, in addition to fines.  “Advising” clients on how to take T                is a seemingly simple question asked agents.  However, agents often do not have the expertise (let alone the license) to be able to advise the client without looking at various factors.

Key Terms

Concurrent ownership
Estate in severalty
Joint tenancy
Limited Liability Company (LLC)
Limited partnership
Partnership
Partition
Right of survivorship
Tenancy by the entirety
Tenants in common
Undivided interest
Unities: 
	Time 
	Title 
	Interest
	Person
	Possession