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Chapter 4—Forms of Ownership
MULTIPLE CHOICE
1. Property owned in severalty
a.
is owned concurrently by at least two persons.
b.
cannot be sold without the consent of several owners.
c.
is an estate of inheritance.
d.
may be willed.
2. An estate in severalty is one held by
a.
one person.
b.
two persons.
c.
three or more persons.
d.
joint tenants.
3. An estate in severalty means
a.
there are several ways to own real property.
b.
several owners of real property.
c.
ownership severed from any other ownership interest.
d.
sole ownership by married couples.
4. Ownership in severalty occurs when
a.
two or more persons have identical interests in the same property concurrently.
b.
husband and wife share ownership of the same property.
c.
property is owned by one person.
d.
two or more persons own the same property in any form of title.
5. Which of the following forms of property ownership offers the greatest flexibility for the investor
wishing to sell his interest?
a.
Limited partnership
b.
Joint tenancy
c.
Ownership in severalty
d.
General partnership
6. A corporation, composed of many stockholders, desired to take title to real property. They would most
likely take title
a.
as a legal life estate.
b.
in severalty.
c.
as tenants in common.
d.
as holders of corporate property.
7. A couple purchased a condominium taking title as joint tenants. Regarding the other owners, interest
in the common areas would be held
a.
as joint tenants.
b.
community property.
c.
as tenants in common.
d.
in severalty.
8. A deed grants a parcel of land to Betty and Art, with no further distinction as to tenancy. Betty and
Art would own the property as
a.
joint tenants.
b.
community property.
c.
partners.
d.
tenants in common.
9. When property is held by two or more owners as tenants in common, upon the death of one owner, that
person’s ownership interest would pass to
a.
the surviving spouse only.
b.
whoever is designated in the decedent’s will.
c.
the surviving owner and/or his heirs.
d.
the remaining owner or owners.
10. With regard to real property estates, tenancy in common refers to
a.
occupancy by 2 or more persons.
b.
ownership.
c.
survivorship.
d.
community property.
11. A tenant in common
a.
has survivorship rights.
b.
can sell his interest and bind his co-tenants.
c.
cannot sell his interest without the consent of his co-tenants.
d.
can sell his interest separately.
12. All of the following are true of a tenancy in common EXCEPT
a.
all tenants hold an undivided interest in the entire property.
b.
each tenant must have a separate deed to his/her share.
c.
the tenants may dispose of all or part of their shares without the agreement of the other
tenants.
d.
there is no right of survivorship among the tenants.
13. The term “undivided interest” means
a.
each co-owner has the right to use the entire property.
b.
when one co-owner dies, the remaining co-owners acquire his interest.
c.
the property has not previously been sold.
d.
no co-owner can sell his interest.
14. Four unities are required for the creation of joint tenancy. They are time, possession, interest, and
a.
consideration.
b.
competent parties.
c.
title.
d.
legal purpose.
15. Sylvia and Bart, sister and brother, purchased a parcel of real property. Each had an undivided one-
half interest. This could be an example of
a.
severalty.
b.
dower ownership.
c.
co-ownership.
d.
curtesy rights.
16. Joint tenants must acquire their interests in jointly held property
a.
at the same time.
b.
from different sources.
c.
in separate instruments.
d.
from a partition action.
17. Concurrent interests in real property must
a.
be recorded.
b.
include right of survivorship.
c.
include equal interests.
d.
include 2 or more people.
18. Three people are going to purchase an investment property as co-owners, and will take title as joint
tenants. As joint tenants,
a.
each will acquire their interests at the different moments in time.
b.
each will receive a separate deed for his/her share.
c.
all will have equal interests in the property.
d.
all will enjoy unequal rights of possession.
19. Which of the following is required to create a joint tenancy?
a.
Unities of time, title, interest and possession need not be present.
b.
New joint tenants may be added without forming a new joint tenancy.
c.
Survivorship exists among joint tenants.
d.
Only a husband and wife may hold title as joint tenants.
20. A brother and sister owned property in joint tenancy. All of their other affairs were separate. The
sister died penniless, leaving many unsecured debts. Her creditors could
a.
attach the property that was owned in joint tenancy.
b.
place alien against the brother’s other pieces of property.
c.
obtain no satisfaction since the property is now owned by the brother.
d.
appeal to the probate court which would pay creditors out of the sale of the sister’s
property.
21. The most widely recognized aspect of joint tenancy is the
a.
right of equal interest.
b.
right of equal use.
c.
right of survivorship.
d.
simultaneous creation of ownership.
22. One of the most outstanding characteristics of joint tenancy is that
a.
death extinguishes the interest of the deceased.
b.
tenants use separate deeds.
c.
tenants hold unequal interests.
d.
interests of the deceased tenant pass to his natural survivors.
23. When a person who owns property in joint tenancy dies, his share goes to
a.
his spouse.
b.
the surviving co-tenants.
c.
creditors.
d.
heirs in his will.
24. The phrase “a poor man’s will” has often been applied to
a.
severalty ownership.
b.
joint tenancy.
c.
tenancy in common.
d.
tenancy in common.
25. A man has separated from his wife and filed for divorce. They own property as tenants by the entirely.
He signs an exclusive right to sell listing agreement. The wife does not sign. The broker then brings a
full price offer which the husband accepts. The wife does not sign. Which is true?
a.
The broker cannot collect a commission since the wife didn’t sign the listing.
b.
The broker may sue the wife for specific performance.
c.
The broker may collect commission from the husband only.
d.
The broker may collect from the husband and wife.
26. In states recognizing tenancy by the entirety for married couples, in order to legally sell property, a
husband and wife must both sign the
a.
listing and the deed.
b.
earnest money agreement and the deed.
c.
listing only.
d.
earnest money agreement only.
27. Hallie and Wally, husband and wife, owned property as tenants by the entirely. Wally sold the
property without his wife’s signature. One day later, he died. The property goes to
a.
the purchaser.
b.
the purchaser and Hallie share equally.
c.
Hallie who owns the entire estate.
d.
no one, there is a cloud on the title.
28. The surviving co-owner may automatically inherit the deceased co-owner’s share when the property is
held
a.
as tenancy in common.
b.
in severalty.
c.
as a trust.
d.
as tenancy by the entirely.
29. Sara Jane, a married woman, and Don Dudley, a single man, may NOT own real estate as
a.
tenants in common.
b.
joint tenants.
c.
tenants by the entirety.
d.
a concurrent estate.
30. Community property could include
a.
property acquired by one spouse before marriage.
b.
gifts made to one spouse or the other.
c.
property inherited by one spouse or the other.
d.
property acquired before marriage and maintained with community funds.
TRUE/FALSE
1. The greatest advantage of sole ownership is flexibility.
2. With tenants in common, if nothing is said regarding the size of each co-owner’s interest, the law
presumes that all interests are equal.
3. Because of the survivorship feature, tenancy in common has loosely been labeled a “poor man’s will.”
4. One of the key characteristics of a tenancy by the entireties is that neither spouse has a disposable
interest in the property during the lifetime of the other.
5. Separate property can be conveyed or mortgaged without the signature of the owner’s spouse.
6. Property owned before marriage and property acquired after marriage by gift, inheritance, or purchase
with separate funds are all considered the couple’s community property.
7. In a general partnership, each partner can loose no more than what he has invested in the partnership.
8. In a limited partnership, the partners provide the bulk of the invested capital, have little to say in the
day-to-day management of the partnership, share in the profit and losses, and contract with the general
partners to limit their financial liability.
9. Because a corporation is an entity (or legal being) in the eyes of the law, the corporation must pay
income taxes on its profits.
10. Most real estate investors shun corporations because of the double taxation feature and because the tax
benefits of owning real estate are trapped inside the corporation.
11. If a limited partner becomes too involved in the management of the partnership he may become a
general partner’s operation of law and have more liability than he bargained for.
12. Subchapter S corporations are not popular as a method of organization for real estate brokers and
developers.
13. A trust is an arrangement whereby title to real and/or personal property is transferred by its owner (the
Trustor) to a beneficiary.
14. In several states, a land trust allows an owner to create a trust wherein he is both the trustor and the
trustee.
15. Real Estate Investment Trusts (REITs) pool the money of many investors for the purchase of real
estate, much as mutual funds do with stocks and bonds.
16. Typically an investment in a REIT requires a large amount of money.
17. The basic concept of community property law is that the husband and wife are merged into one by
marriage.
18. In community property states, property not held as community property is designated as separate
property.
19. In a state recognizing community property, real property acquired before marriage is brought into the
marriage as community property.
20. A joint venture is a partnership to carry out numerous business projects.
COMPLETION
1. When a property is held by one person, it is called an estate in ____________________.
2. In nearly all states, if two or more persons are named as owners, and there is no indication as to how
title was taken, they are presumed to be ______________________________.
3. The most distinguishing characteristic of joint tenancy is the right of ____________________.
4. Some states automatically assume that a tenancy by the entirety is created when
____________________ persons buy real estate.
5. In regard to a partnership, ____________________ refers to the possibility that it may be difficult to
sell one’s partnership interest on short notice in order to raise cash.
6. A joint venture is a partnership formed to carry out a ____________________ business venture.
7. A trust is an arrangement whereby title to real and/or personal property is transferred by its owner (the
trustor) to a ____________________.
8. A ____________________ trust takes effect after death.
9. Investors in real estate investment trusts are called ____________________.
10. ____________________ is a broad term that simply refers to two or more individuals who have
combined to pursue an investment enterprise too large for any of them to undertake individually.
MATCHING
Choose the one most appropriate answer for each.
a.
community property
k.
right of survivorship
b.
concurrent ownership
l.
S corporation
c.
estate in severalty
m.
separate property
d.
general partnership
n.
tenancy by the entirety
e.
illiquidity
o.
tenants in common
f.
inter vivos trust
p.
undivided interest
g.
joint tenancy
q.
unity of interest
h.
limited liability company
r.
unity of possession
i.
limited partnership
s.
unity of time
j.
poor man’s will
t.
unity of title
1. composed of general partners who mainly organize and operate the partnership and limited partners
who provide the capital
2. a form of joint ownership with the right of survivorship which is reserved for married persons
3. the joint tenants must enjoy the same undivided possession of the whole property
4. provides the liability protection of a corporation with profit-and-loss pass-through of a partnership
5. husband and wife share equally in any property purchased during marriage
6. takes effect during the life of its creator
7. a label given to joint tenancy because of its right of survivorship feature
8. joint tenants must acquire their interests from the same source i.e., the same deed or will
9. a method of combining the capital and expertise of two or more persons, each retaining financial
liability
10. organization of members or managers with little formal organization and limited liability
11. ownership by two or more persons at the same time
12. each joint tenant must acquire his or her ownership interest at the same moment
13. owned by one person; sole ownership
14. surviving joint tenants automatically acquire all the rights of the deceased joint tenant
15. each joint tenant has exactly the same rights as all other joint tenants
16. property acquired before marriage in a community property state
17. the possibility that it may be difficult to sell one’s partnership interest on short notice
18. form of property co-ownership that features the right of survivorship
19. shared ownership of a single property with no right of survivorship
20. ownership by two or more persons that gives each the right to use the entire property
