chapter 4. georgia real estate an introduction to the profession eighth edition chapter 4 forms of...
TRANSCRIPT
Chapter 4
Georgia Real Estate An Introduction to the Profession
Eighth Edition
Chapter 4
Forms of Ownership
Key Terms• community
property• concurrent
ownership• estate in severalty• four unities• joint tenancy
• right of survivorship
• tenancy by the entirety
• tenants in common• undivided interest
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Sole Ownership
When title to property is held by one person, it is called an estate in severalty.
Businesses usually hold title to property in severalty.
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Tenants in CommonWhen two or more people wish to share the ownership of a single property, they may do so as tenants in common.
Each owns an undivided interest in the whole property.
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Tenants in Common
The interests do not need to be the same. Each owner can independently sell, mortgage, give away or devise an individual interest.
Each tenant in common has a separate legal title to an undivided interest.
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Tenants in Common
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AA BB CC
AA BB C’s heirsC’s heirs
One parcel of land;Three owners with unity of possession
What happens if C dies?
Wording of Conveyance
If nothing is said regarding the size of each co-owner’s interest in the property, the law presumes that all interests are equal.
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Wording of Conveyance
In Georgia, unless stated otherwise, when two or more people are named as owners, they are presumed to be tenants in common with an equal ownership interest.
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No Right of Survivorship
With a tenancy in common, if a co-owner dies, the co-owner’s interest passes to his or her heirs or devisees.
There is no right of survivorship.
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Co-Owner Responsibilities
Income generated by the property belongs to the tenants in common in proportion to the size of their interests.
Similarly, each co-owner is responsible for a proportionate share of taxes, repairs, upkeep, etc.
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Co-Owner Responsibilities
If co-owners cannot agree on a plan for dividing or selling the property, it is possible to request a court-ordered partition.
A partition divides the property into portions so that each person can hold their interest in severalty.
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Co-Owner Responsibilities
If the property cannot be physically divided, the court will order the property sold and the proceeds divided among the co-owners.
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Joint Tenancy
Joint tenancy is another form of concurrent ownership. Joint tenancy has the right of survivorship.
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Joint Tenancy
Upon the death of a joint tenant, that interest passes to the surviving joint tenant(s). The interest does not pass to the heirs or by a will.
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Joint Tenancy
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AA
CC
AA BB CC
One parcel of land;3 owners, 4 unities (PITT)
If C dies?
BB
Four Unities
To create a joint tenancy, the four unities must be present: possession, interest, title and time.
Unity of possession means that the joint tenants must enjoy the same undivided possession of the whole property.
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Four Unities
Unity of interest means that the joint tenants own one interest together.
If there are 2 owners, they each own 50%.If there are 3 owners, they each own 33.3%
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Four Unities
Unity of title means that the joint tenants acquire their interests from the same deed.
No matter how many joint tenants there are, there is only one title to the property.
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Four Unities
Unity of time means that each joint tenant must acquire their ownership interest at the same moment.
It is not possible to add new joint tenants later.
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Right of Survivorship
Upon the death of a joint tenant, that interest in the property is extinguished.
Ultimately, the last survivor becomes the sole owner.
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Right of Survivorship
The right of survivorship has made joint tenancy a popular form of ownership among married couples.
Any property held in joint tenancy goes to the surviving spouse without the delay of probate.
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“Poor Man’s Will”
Because of the survivorship feature, joint tenancy has been labeled a “poor man’s will.”
It affects only property held in joint tenancy.
As a joint tenant, you cannot will your joint tenancy to someone.
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“Poor Man’s Will”
Georgia does recognize joint tenancy, but the deed must clearly state that it is a joint tenancy with the right of survivorship.
Only a human being can be a joint tenant. A corporation cannot be a joint tenant.
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Tenancy by the EntiretyTenancy by the entireties is a form of joint tenancy specifically for married people.
A husband and a wife serve as in indivisible legal unit.
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Tenancy by the Entirety
While both are alive and married to each other, both signatures are required to convey title.
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Tenancy by the EntiretyA tenancy by the entirety can be terminated only by joint action of husband and wife.
Georgia does not recognize tenancy by the entirety.
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Effect of Divorce
In the event of divorce, the parting spouses become tenants in common.
This change is automatic. Tenancy by the entirety can only exist between a husband and a wife.
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Community Property
Georgia is not a community property state.
The concept is that the husband and wife contribute jointly and equally to the marriage and should share equally in any property purchased during the marriage.
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Separate Property
Property owned before marriage and property acquired after marriage by gift, inheritance or purchased with separate funds can be exempted from the couple’s community property.
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Caveat to AgentsThere may be an occasion when a buyer will ask the real estate agent how to take title.
If the agent attempts to respond with a recommendation, the agent is practicing law. A license is required to practice law.
Refer the buyers to a lawyer for advice.
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