© 2009 by south-western, cengage learning samirlander chapter 8

© 2009 by South-Western, Cengage Learning

SAMSAMIRLANDERIRLANDER

Chapter 8Chapter 8

Florida Real Estate:Florida Real Estate: Principles, Practices and Principles, Practices and

License LawLicense Law

Chapter 8Chapter 8

Property OwnershipProperty Ownership



Key TermsKey Terms

Bundle of rights

Chattel

Common property

Concurrent ownership

Cond-op

Condominium

Cooperative

Declaration of condominium

Elective share

Estate at will

Estate for years

Estate in severalty

Estate in land

Exempt property

Fee

Fee simple absolute

Fee simple defeasible


Key TermsKey Terms

Fee simple estate

Fixtures

Freehold estate

Holdover tenant

Homestead

Joint tenancy

Land

Leased property

Leasehold

Leasehold estates

Life estate pur autre vie

Life estates

Monthly maintenance

Owners association

Partition

Personal property

Personalty

Property


Key TermsKey Terms

Proprietary lease

Real estate

Real property

Remainderman

Reversionary interest

Right of survivorship

Separate property

Statutory life estates

Tenancy at sufferance

Tenancy at will

Tenancy by the entirety

Tenants in common

Time-shares



Feudal system: land ownership vested only with the Crown

Leased property: Leased property: possessory right of the property



Estates were reversionary and defeasible

Land owned by the Crown

Individuals possessed rights only for their lifetime

Estates were not inheritable



Allodial system

Land vests with individual owners

Inheritable estate


Real Property CompositionReal Property Composition



Littoral rights: land adjoins a stationary body of water

Riparian rights: land adjoins flowing bodies of water



Flowing water: owner has right to limited nonexclusive use

Property boundaries/riparian rights:Navigable: high water mark

Not navigable: middle of watercourse



Oil

Gas

Mineral rights

Extend to center of earth’s core



Total legal bulk of Total legal bulk of improvement made to improvement made to landland


FixturesFixtures

Become real property by utility and permanence

Review items to remain with the seller


FixturesFixtures


FixturesFixtures

Method of attachmentWill removal result in damage?

AdaptabilityPermanently attached?

Intent of the partiesAgreement in advance


FixturesFixtures

Installed and used in conduct of business

Personal propertyRemoved prior to expiration of lease

Property returned to original condition


FixturesFixtures

Property is soldFixtures remain

Personal property does not remain

Taxes AssessedFixtures contribute to value = higher taxes


FixturesFixtures

Property is appraisedFixtures add value

Personal property does not add value

Insurance on real propertyFixtures are covered

Personal property covered separately


Types of EstatesTypes of Estates

Freehold estates

Nonfreehold estates

Less than freehold



Interest in land held for an indefinite time

Lifetime or longer

Right of:Ownership

Possession



Freely hold property

Types of freehold estatesFee simple

Fee simple absolute

Fee simple defensible

Life estates



Fee: ownership and all rights in land

LeaseholdLimited duration ownershipRight of possession in the improvement



Characteristics: Held for lifetime or longer

Inheritable

Fee Simple AbsoluteFee Simple AbsoluteMost common and desirable



Fee Simple AbsoluteFee Simple AbsoluteCharacteristics:

Least restrictive

Limited only by government rights

Nondefeasible



Fee Simple DefeasibleFee Simple DefeasibleConditions

If conditions are violated:Rights of ownership can be defeated

“but if”



CharacteristicsHeld for a lifetime

Not inheritable

Exception: life estate : life estate pur autre viepur autre vie

Lifetime of 3rd party

Reversionary



3 types of voluntary life estates

Life estate in remainder

RemaindermanRemainderman



Life estate in reversion



Life estate by reversion



Dower: wife’s right to husbands property upon death

Curtsey: husband’s right to wife’s property upon death

Homestead protection: life estate to surviving spouse



Freehold: ownership

Nonfreehold: leasedLeasehold estatesLeasehold estates

Tenant: Lessee

Landlord: Lessor



Rights of the parties

Tenant may occupy with a valid lease

Abides by terms

Pays rent

Is not in default



Rights of the parties

Landlord may not occupy

Landlord has a reversionary estatereversionary estate

Reclaims property upon termination of the lease



Estate for yearsEstate for yearsStarting and ending date

Estate at willEstate at will

Tenancy at willTenancy at will

No specified term

3 Categories3 Categories



Estate at SufferanceEstate at Sufferance

Tenancy at SufferanceTenancy at Sufferance

Tenant remains in possession beyond legal term without consent

Holdover tenantHoldover tenant

3 Categories3 Categories


Types of EstateTypes of Estate

Estates

Freehold Estates Less- than Freehold Estates

Estates in fee Life Estates

Fee simpleabsolute

Estates in:RemainderReversion

Reservation

Fee simplequalified

Estates for yearsEstate from period to period

Estate at willEstate at sufferance


Forms of OwnershipForms of Ownership

Estate in severalty: Estate in severalty: one person

Severalty: severed



Four TypesJoint tenancy

Tenancy in common

Tenancy by the

entirety

Community property




Not willable / inheritable

Four unitiesTime

Interest

Title

Possession



ossessionossession

nterestnterest

imeime

itleitle

urvivorshipurvivorship

PP

II

TT

TT

SS



May sell without consent of other joint tenants

New owner becomes a tenant in common

Corporations have perpetual life

May not own as joint tenants



Unity of possession

Separate title

May sell without consent of others

No right of survivorshipInheritable



Reserved for husband and wife

Four unities:Possession

Interest

Title

Time

5th Unity - marriage




Neither spouse may encumber or sell without consent of other

Terminated by:Joint action

Divorce

Death of either spouse



Equal interest in property acquired during marriage

Not community property:Acquired before marriage

After marriage through :

Gift

Will

Florida is not community property state



Partition: Partition: dividing of common interests into separate interests

Two methodsPartition in kind

Partition in law

Two ways:Voluntary agreement

Court



Special interests in Florida

Elective share

Exempt properties

Homestead



Elective ShareElective ShareSurviving spouse entitled to a share of deceased estate

Share is 30% in Florida



Exempt PropertyExempt PropertyUpon death, surviving spouse is automatically entitled to personal property

Property up to $10,000 plus automobiles



HomesteadHomesteadMust reside in home

Legal title as of Jan 1

File for exemption



HomesteadHomesteadRelief from debt except those from:

Property taxes

Special assessments

Mortgages

Vendor liens

Construction liens



Homestead ExemptionHomestead ExemptionAnnual property tax exemption

Credit against tax bill

Maximum amount: $25,000



Homestead ExemptionHomestead ExemptionExample:

$100,000 Assessed Value

- 25,000 Homestead Exemption$75,000 Value subject to tax


Community OwnershipCommunity Ownership

Four Types

Condominiums

Cooperative

Planned-unit development

Resort time-sharing



“city within a city”

Self-government

Assessments of common area maintenance

Provision for services



Fee simple title to an individual unit

Separate propertySeparate property

Undivided interest in remaining elements

Common area



Common PropertyCommon PropertyLand

Interior and exterior walls

Other improvements

Hallways and stairs

Recreation areas and landscaping

Parking lots



Created by:

New construction

Conversion



Types of condo properties:High-rise buildings

Garden apartments

Townhomes

Warehouses

Office building

Detached single family homes



Enabling legislation:Horizontal Property Act

Strata Title Act

Condominium Act

Provides for horizontal subdivision of air space

Florida Condominium ActChapter 718



Master deedOwnership to individual units transferred by deed

Ownership rights:Sell

Sublease

Gift

Will



Owners associationOwners associationControl, regulate and maintain common areas

Fees or carrying chargesCommon area maintenance

Insurance

Management / legal fees

Common area property tax

Reserves



Separate property tax bill

FinancingNo joint liability

MaintenanceCommon areas: Owners association

Individual units: Individual owners



Florida Condominium Act

Declaration of condominiumDeclaration of condominium

Bylaws

Plat map

Conveyance document



Disclosures

Right to rescind:New – 15 days

Resale – 3 daysRefund of deposit



Title to land, building, and improvements held by not-for-profit corporation

Purchase shares of stock

Proprietary lease: Proprietary lease: occupancy agreement

Monthly maintenanceMonthly maintenance



Corporation pays:Mortgage

Property tax

Repairs / maintenance

Management expenses



Allocation of sharesSquare footage of unit

Location

Exposure

Floor height

View and outdoor spaceBalcony

Terrace



Board may:Screen shareholders

Reject any sale

Grant permission to transfer shares

Approve or deny subleasing

Charge flip tax



Cooperative Act disclosures:Legal description

Common area description

Title held

Liens

Easements

Lawsuits

Judgments

Manager

Date completed

Operating statements / budgets

Sale / resale procedures



80/20 RuleCollection of rents:

Retail space

Garage rents

Cellular antennae

Satellite dish

Vending machines

Other



Condo-opCondo ownership in land

Owners association

Developer ownership in land for commercial space

Retail space

Garage



Cooperative setup / Condominium bylaws

Sale / leasing flexibility

Maintenance tax benefits

Per share deduction of mortgage interest

Tax benefit creates marketing tool

80/20 eliminated



Individually owned homes and ownership of common areas

Association owns common areas

Unit owners own share of association



Created by local zoning lawsSmaller lots increase density

Developer creates common areas

Single family detached dwellings

Attached townhomes



Time shares Time shares Resort property

Unit ownership for a specified period

Organized 3 waysRight-to-use

Interval ownership

Club plan



Florida Time-Share ActSales associates must be licensed

10 day right to rescind

Timeshare registered with SEC are exempt

© 2009 by south-western, cengage learning samirlander chapter 8

Documents

crownleased property

florida real estate

land ownership

high water marknot navigable

flowing bodies of water

possessory right

center of earths core

middle of watercourse