Monday April 7, 2003 Real Estate Law
Code of EthicsEthical Guidelines: Professional ethics are governed by various regulations establishing guidelines for acceptable and unacceptable conduct within a particular profession. The legal profession abounds with such regulations to ensure that the profession responsibility serves the society in which it practices. These regulations take in to consideration the interest of the general public, clients, the lawyer, nonlawyers working in legal environments, including paralegals, and the paralegal system as a whole. Further, these regulations come from state statutory and case law, rules of the court, and codes of ethical conduct adopted by the American Bar Association (ABA) as well as state bar associations. In addition, paralegal associations provides guidelines for the ethical conduct of their members.
American Bar Association (ABA) standards: ABAs Code of Professional Responsibility has been adopted by most states bar associations as the official standard for legal conduct. In 1983 the ABAs House of Delegates approved a revised code combining the prior rules with a set of ethical considerations clarifying and in some instances imposing more stringent restraints on legal conduct. This revised code was named the ABAs Model Rules of Professional Conduct. Together with these two codes commonly are referred to as the ABA standards. Attorney responsible for all actions of the paralegal.
The National Association of Legal Assistants (NALA): A voluntary national association of paralegals, has issued ethical canons in its Code of Ethics and Professional Responsibility, encompassing the ABA standards and applying them to paralegals. The last canon states a paralegals ethical conduct is governed by the ABAs Code of Professional Responsibility.
The emphasis of the NALA code is to clarify the role the paralegal plays in a legal environment, noting the tasks that may and may not be undertaken by the paralegal and stressing lawyer supervision and ultimate responsibility for the work product.
· Meet with client
· Assessment of case
· Disclose to client you are not an attorney (not doing so is an unauthorized practice of law)
· Fee arrangement must be sated expressly
o Flat fee: for the purpose of doing routine matters and filings (An attorneys fee set forth as a sum certain for the performance of a specific task)
o Hourly fee: An attorneys fee based upon the amount of time the attorney spends on client matter
o Contingency fee: Fee contingent upon the client reaching settlement or winning in court. The payment the attorney receives is set forth as a percentage of the settlement or court award. New Yorks fee is 1/3rd
§ Client Trust Fund Account: An account separate from the law firms regular business account in which fee advances, deposit money, closing proceeds, and/or escrowed funds are placed.
· A fund paid into by the client to be used for client matters. An accounting must be given to the client similar to the balancing of a checkbook. THERE IS TO BE NO COMINGLING OF FUNDS.
Ethical guidelines in statutes, court decisions, and association rules all state that paralegals must not engage in the unauthorized practice of law. This includes such practices as advising clients of his or her legal rights and remedies, representing a client in court, making strategy decisions in client matters, negotiating settlements, accepting cases, and setting fees. Within these parameters paralegals may perform a multitude of functions such as conducting client interviews locating and interviewing witnesses, conducting factual and legal research, drafting legal documents and correspondence, and assisting at depositions, hearings, trials, and real estate closings.
Competence: All cases are to be handled with promptness and
- diligence (attentiveness and care)
- statute of limitations: A statute indicating the time periods within which a suit must be bought or be forever barred.
- Tickler system: A method of keeping track of priorities and deadlines.
- Confidentiality: an ethical concept prohibiting a lawyer and others in a law firm from voluntarily disclosing information about a client matter.
- Attorney-client privilege: A rule of evidence law that prevents a court from compelling the revelation of communications between lawyer and client.
Conflict of interest: A situation in which a lawyers professional judgment might be affected because of business or personal interests.
(Example: husband and wife cannot have the same attorney in a divorce action.
· Subject matter
· Chinese wall: barred from being involved with a former client in a new law firm because he/she may have privileged information.
o A situation in which an attorney or paralegal is isolated from a client case for conflict of interest reasons.
· Doctrine of imputed disqualification: A doctrine which provides that the entire body of lawyers in a firm are treated as one for conflict of interest purposes.
Classification of Property
Types of Property
- Personal property: Any movable goods
- Real property: Land
- Fixture: anything affixed to real property (no longer movable)
- Article IX of UCC must file a filing statement in order to remove.
FILINGS DONE AT THE COUNTY CLERKS OFFICE PUTTING THE WORLD ON NOTICE
- BILL OF SALE
1. Also referred to as real estate or realty, is a general term pertaining to land and all things permanently attached to the land.
2. It also refers to a composite of physical components including:
- subsurface, and
- air space, and the rights attendant to each: Air rights extends upward to public space (planes)
Water Rights: lakes, streams, water coming from lakes and streams owner who abut (adjacent to water)
Riparian Rights First in time first in right
Water rights pertaining to a landowner whose property abuts a river, stream, or similar watercourse.
Littoral rights: Water rights pertaining to a landowner whose property abuts a lake, ocean, or sea.
Appropriation doctrine General rule: Natural rights (drinking, bathing, fishing)
outweigh artificial rights.
1. Rights pertaining to property covered by water
2. on or adjacent to a landowners boundaries as well as
3. rights in the use of the water itself.
How is property acquired?
1. Purchase: K ---à Closing
Grantor (person who conveys the land)
Grantee (person who receives the land)
Future Interest: hated because an English Common-Law Term which provided for unlimited rights to property.
FS (A) Fee simple absolute: an estate that grants the property owner each of the four basic property rights.
LE - Life estate: an estate in which the grantor conveys title to real property to another for a
period of time measured by somebodys life.
Life estate pur autre vie: A life estate granted for the lifetime of someone other than the
VR Vested Remainder Grantee who follows a life estate (if no conditions) (Conveyee
received property after a life estate.
CR Contingent Remainder Grantee who may follow a life estate but must satisfy conditions to
Leasehold Estate: A determination of duration as it relates to landlord/tenant.
· Estate for years: lease usually for more than 1 year
· Periodic Tenancy: from period to period (month to month)
· Tenancy @ will Freely occupy premises based (both parties are fully aware that the tenancy can terminate at eithers will.
· Tenancy 2 Sufferance (Holdover Tenant) (Person who does not want to leave)
If tenant stays another month beyond time a new contract arises. Can be a previous contract or a new contract.
- Landlord accepts payment
- Landlord accepts payment conditionally
Methods of Title HoldingConcurrent Estates: Joint ownership of property. Two or more persons in possession of property
JT Joint Tenancy 4 requirements 4 unities
A form of concurrent ownership which two or more persons have undivided
interests in property with right of survivorship.
Each co-owner in a JT have the right to enjoy the use of the entire property. Unlike a tenancy in common
1. Unity of possession
2. Unity of Title
3. Unity of Interest
4. Unity of Time
T/C Tenancy in Common
If one or more of the Unities is not present - deemed tenants in common.
TE Tenancy for the entirety When husband/wife purchase property together.
1. Neither one of the parties may sell property separately.
2. One party cannot convey the property
3. Severed by divorce
4. Right of survivorship Living person has entire land
5. any unilateral action will not sever.
2. Devise àInheritance:
The interest a person in real property is based on the type of estate or tenancy conveyed
a. With Will (Testate) Governed by the Law of Intesate
Elective share: If provided for under will (a way for spouse to get a 1/3rd of the estate)
e.g. maximum - $1. (if spouse gets a dollar). The value of the estate determined and divided by thirds. Spouse gets a third of that.
Right of election: Can elect if party feels not provided for in the will.
1. Total estate
2. Minus value given
3. 6 months to 2 years to file
Estate:Law of Inteste
b. Without Will (Intestate)
Testator: person in will
Decedent: deceased persons will
3. Gift: Must be in writing as per the Statute of Fraud (real property)
Donor: Person who conveys the gift
Donee: person who receives the gift
4. Adverse possession: Affects marketability of the land -Title
The acquisition of title to real property through:
C ontinuous à§ 10 years in NYC (20 years elsewhere)
O pen & Notorious ( Out in front everyone knows
A ctual physical possessioin
H ostile Without owners consent or knowledge
Toll property: If party is a: minor, convicted, insane, physically debilitated time period continuous when
Tacking: Can sell the land (e.g. there for 5 years can tack on if party (acquiring the land) stays on for 5
years the land can be acquired this way. Can- purchase, contract, devise, or gift.
TYPES OF BUSINESS ENTITIES
Sole partnership: One individual has a business
Partnership: When 2 or more persons carry out business to make a profit.
1. general partnership:
· no protection (personally liable)
· does not have to file business with the state
2. limited partnership:
· protection: only what he/she has contributed to partnership is what is liable in relation to partner (personal assets protected)
· not personally liable
· must file limited partnership agreement with state.
- partnership does not exist until certificate is filed.
Corporation: For a corporation to exist it must file with the state.
- Create corporation;
- find the shareholders to invest
- through articles of incorporation
o Bylaws procedural guide that runs the corporation.
o Shareholders Owners of the corporation
§ If shareholders hire an officer only they can fire them.
o Board of Directors
Limited Liability Corporation (LLC)
- Characteristics of corporation
- Gets tax benefits of partnerships (hybrid of corporations & partnerships)
o Corporation protection
o Taxed like a partnership
Equitable distribution: Courts of equity are courts looking for just means
to resolve disputes.
Two types of property
- separate property: all property acquired by either spouse prior to marriage, includes
- income prior to marriage that is difficult to separate.
- Personal injury
Spouse has not claim this property.
- marital property: all property after marriage; real or otherwise owned equally by spouse regardless of the contribution.
- If property is maintained by both parties, if property is to be severed amount above initial value is divided.
Categories of Real Property
Condominiums: a form of ownership, where property owner
- owns the interior of his/her unit.
- Plus an undivided interest, expressed as a percentage interest in the common elements of the condominium.
- Unit owner given a deed upon closing
- Responsible for his/her own real property taxes and mortgages
- Undivided interest in common areas: halls, stairs, maintenance
- Limited common areas: assigned parking spaces
- File declaration of condominium considered master deed
Condominium Association: Comprised of members who are:
- Unit owners
- Are a corporation (articles of incorporation must be filed with the state
o By-laws etc. create officers (same as corporation)
o Executive board: elected by unit people. Functions to
§ 1. Ensure rules and regulations are followed as to:
· paying employees
· liability insurance
· if failure to meet requirements (pierce corporate veil)
· created by statute
Maintenance fees: Apportioned by all unit owners. If owner fails to make payments a lien is
placed on the mortgage (he/she can be removed from the premises) they can foreclose.
· Multi-unit building owned by corporation
· Corporation owned
· Become a shareholder = long term lease with corporation
· Governed by state law
· Tenants are shareholders of corporation
· Lease evidence the ownership interest in a co-op. (stock certificate) e.g. lease + stock certificate.
· Property is taxed as a whole/whole building assessed and taxed must pay periodic assessments.
· Restrictions or covenants
o PROBLEM: If one shareholder fails to pay other shareholders are forced to cover that share.
Time Share: Type of ownership when purchase rights to use real property are for
a limited and specific time.
a. must be in writing (Statute of Frauds)
b. identify number of units
c. muns know total amount of units
d. duration of time share
e. how it affects liens
Commercial Property Development
Master plan: A plan created by local planning commission that provides for land use, conservation, circulation, noise regulations, circulation, noise regulations, and public facilities in a given area.
Zoning is the primary mechanism for implementing the master plan.
To change from residential to commercial:
Statutatory substantial change in circumstances
State decides by:
c. competition (how does it benefit community)
d. various real estate taxes
Hiearchy of Zoning:
Zoning ordinaces divide land use into a number of classifications
Types of zoning ordinances:
Ownership Restrictions contd
Variance: Whereby deviation from strictly complying with based on undue hardships.
Must show compliance with zoning ordinance undue hardship must prove this.
Special exceptions to zoning alliance: Example: synagogue built in a Jewish residential
neighborhood; because congregation must walk
· preexisting prior to ordinance (grandfather clause)
· exception allowed because it existed prior to zoning ordinance
· if sold new owner must comply with zoning ordinace
o subject to variance
Ways that Acquiring Property Effects Title
Escheached to Sate: Perhaps the most encompassing power of the state, and sometimes local, government is the right of reversion of title to private property in their jurisdiction. This right of reversion is exercised when a property owner dies intestate leaving no heirs. In this circumstance his or her real property will escheat to the state.
Eminent Domain: Right of government body to take away private property for public use for just compensation (market value) at the time being sold.
Takings Clause: Under 5th Amendment. Specific Federal government Dictates how state should act and perform.
Restricted Covenant: Any limitation on the deed runs with the land
Covenant: is a limitation applicable to successive owners
13th Amendment: Private discrimination is prohibited
Easement: enformement right to use real property of another for a particular purpose:
Easment created by: Prescription: exactly like adverse possession.
Grant: expressly granted by grantor
Types of Easments:
1. Easement in Gross: Noncommercial purpose; personal (taking something and leaving, only servient
tenant is burdened.
2. Easement Appretenant: Involves 2 parcels with a dominant and servient
Termination of Easement
Grant: (Grantee/dominant tenant)
Grant is in writing a written release
Must specify perpetual or specific length of time.
Merger: Easement terminates @ merger
2 properties come together
Abandonment: Not merely non use: Must be specific intent
Know how easements created, types, law terminated
Lien: Claim or charge against property for payment of:
a. a debt
b. general lien
c. specific lien: mortgage
Legal Description: The exact description that sets forth boundaries and location of property indicates
where property begins and ends.
§ As a paralegal compare and look for discrepancies.
- Metes & bounds: Most descriptions Literally outlines the boundaries of a parcel of land. Finds the point of beginning.
- Describes course and distance in which bondary lines travels perimeter of property each description is called a call
- Mete: distance of a line
- Bound: direction of a line
- Governmental Survey Created by Federal Government (old) rectangular survey
- Nath & smith lines: principal meridian lines, main line, east & west base lines.
- Check each line added (box)
- Relationship to township lines
- Plat Method: Usually for subdivision
- Subdivision numbered with Plat
- Restriction for subdivision is called implied reciprocal servitude. Negative restriction different restrictive covenant.
- Under court of equity, no money damages
Implied reciprocal servitude:
Elements: a. common rantor
b. contractor created
c. restriction placed on common plan
d. 1st deed has to be in writing.
e. as subdivision is sold to individual owners must abide by certain restriction
Difference: Other subdividers can enforce restrictions. Because of common scheme. There is a basic
look to be achieved.
Surveying: Investigating or examining the boundaries of a parcel of land or locating the improvements on the parcel. The surveyor examines the land and puts results in a platt of survey (findings)
Types of surveys:
- boundary survey: boundary of parcel
- As built survey: for any improvement on a parcel
Usually buyer pays for survey, insurance requires survey; find if seller has surveyed
Once a contract of sale is signed process of sale begins
Type of Survey
Name and address of parties
Stipulate in contract for sale seller provides all surveys
As a paralegal provide to surveyor: list of restrictions; (see handout check list)
Unmarketable: If restrictions or defects are found.
Seller: Good & marketable title by closing or can be cured of: (encumbrances, liens or easements)
Laws of Agency
Real Estate Broker: person licensed under state law to facilitate a real estate transaction in return for commission (compensation). A realtor is also a licensed real estate transaction in return for commission (compensation). A realtor is also a licensed real estate broker.
Difference: Realtor must be a member of local board of realtors
Both are agents of client (usually seller) since he is an agent laws of agency governs. Agent has a fiduciary duty to seller/ client (principal)
Fiduciary: One who acts in a representative capacity of another. Duties between agent and principal
Specific agent: only duty is to sell that particular house etc.
General agent: relationship with seller is general (real estate transaction)
Subagent: person who works for agent and has no obligation to principal
Laws of Agency:
Duties: Broker acting on behalf of principal
- Duty of Care: where broker exercises reasonable skill and knowledge in representing the principal.
- Duty of Obedience: Required to follow-all lawful instructions given by principal
- 13th Amendment: Always act in best interest of principal. Broker cannot sell to himself. Additionally: Broker cannot enter into a contract without disclosing he/she is a broker
- Duty of Confidentiality: Must preserve all confidences of principal.
- Duty of Disclosure: Requires broker to disclose all material facts relating to the property.
§ If defects are found must disclose to buyers.
§ Broker cannot mislead or deceive buyer.
- fraudulent statements were made.
- If fraudulent statements were relied upon by buyer if that occurs broker will loose commission
Caveat emptor: Let the buyer beware (common law term)
Broker must keep an accounting: How the Broker safeguards sellers funds. Broker required to keep monthly transactions (trust liability) comparison to bank statement. (check and balance) must be as specific as bank account
Earnest money deposit: Sum of money paid by buyer when entering into contract to show his intent to buy escrow account)
Advance fee trust account: special account for advertising or court; assists broker for sale of house.
Statute of Frauds: Exception: Licensed real estate broker can make an oral agreement
(In order for broker to receive commission must bring ready able willing
Listing Agreement: Between seller and buyer to sell the land.
- Open listing (general listing) Grants right to solicit and receive offer. (worst type for broker; may not receive commission)
- Exclusive listing: When seller agrees to list property with broker exclusively.
Seller has right to find another buyer if seller does broker gets no commission.
- Exclusive rights to sell: Doesnt matter who sells property broker receives commission
National Association of Realtors: Broker must follow rules same as ABA
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Real Estate Contract for Sale or Purchase must contain:
- Effective date of contract
- using legal names:
- clear marital status indicated if necessary.
- Legal description of property
must be indicated
comparison of legal descriptions ( make sure no discrepancies to contract)
- Method of payment:
There are four basic requirements/possibilities
a. New loan: acquired from lending institution
b. Assumming the sellers mortgage: Buyer assumes personal responsibilities for sellers mortgage. If default à foreclosure seller secondarily liable.
c. Subject to the mortgage
Lien Theory: New York is a lien theory state: Owner has title
Title Theory: Bank has title. Owner only has possession.
Quality of the title: Seller conveys marketability of land. (stated in contract) Buyer must be allowed to inspect the land.
If seller cured any defects: Title is marketable
Under common law: Risk of loss was borne by buyer.
New York Uniform vendor and Purchase Act: By statute
- risk of loss is on seller in New York prior to closing
Ensures seller maintains property up until closing
- Some states maintain real/loss assumed by buyer prior to closing
Risk of Loss
- closing time & closing date (indicate in contract if time is of the essence (Time is of the essence)
Closing costs: Can be prorated between parties (divided risk of loss)
TYPES OF DEEDS:
Deed: formal written instrument that conveys title of property from one party to another. Seller must sign in-order to convey property. Documents evidence of transfer of property.
- Describes quality of title
- Outlines restrictions
- Must have words of conveyance
o Example: Alex deeds (gives) grantors present intent to convey property
o Who are the players: grantor/buyer
- Must state if fee simple or life estate (usually for a specific length of time)
- Deed must be notarized
- Delivery: must be complete inorder for deed for valid.
Deed must be physically given to buyer at closing
Three types of Deeds:
- General Warranty Deed: Sometimes called a full covenant and warranty deed or simply a warranty deed. This type of deed provides the greatest degree of protection for the buyer (grantee). With a general warranty deed the seller (grantor) is stating that the seller has valid title and will defend that title against any defect arising from the actions of the seller or the actions of any of the sellers predecessors. Further; the seller is stating that he or she will defend the buyers title against any claim made against that title. In essence, when the seller coveys real property through a general warranty deed, the seller is making covenants (promises or guarantees) to the buyer
Covenant of seizin: guaranteeing the buyer that he or she has good title to convey
Covenant against encumbrances: guaranteeing the buyer that the title being conveyed is not encumbered by easements, liens, restrictions, dower or curtesy rights, or other encumbrances with the exception of those set forth in the deed instrument.
Covenant for quiet enjoyment: covenant guarantees that the buyer may own ownership of the real property undisturbed by claims against his or her title to the property by third parties.
Covenant of further assurances: by which the seller guarantees that if necessary the seller will obtain any and all legal instruments to cure a defective title. Lastly
Covenant for warranty: Seller guarantees that he or she will defend the buyers good title to the property forever. If any of these covenants are breached by the seller, the buyer may bring suit for damages against the grantor or former grantors.
- Special Warranty Deed: Also known as a limited warranty deed. Guarantees that the seller is making to the buyer and all subsequient purchases are limited in scope. By using this deed instrument to convey title, the seller is warranting only that he or she has done nothing to encumber the title to the property. (with the exception of any encumbrances set forth in the deed itself). But does not provide further assurances or guarantees with regard to the sellers predecessors and therefore will only be responsible to the buyer for any defects caused by his or her own actions.
- In New York called Bargain and Sale Deed
- Quit Claim: Seller does not wish to make any guarantees to the buyer. Grantor transfers whatever interest he or she may have without making any warranties regarding the quality of the title.
- Absolutely no covenant as to: quality of land and title
Recording Statutes: Each state has a statutory law that prescribes the requirements for recording document and determines the priority rights of real property if there are conflicting claims. This is called putting the world on notice by filing claim at the county court house.
Bona fide purchaser for value: Someone who purchases property in good faith and for valid consideration.
There are three types of recording statutes:
1. Race status: A recording statute whereby priority of claim to title of real property is determined literally by a race to the recording office.
2. Notice statutes:
A recording statute whereby the notice a subsequent purchaser has of a previous purchasers deed is imperative in determining the priority of title to the real property.
The notice is subsequent purchaser has a previous purchasers deed is controlling. Assume the same scenario with Stanley, Karen, and Nicholas, but add the fact that Nicholas had actual knowledge of Stanleys prior conveyance to Karen at the time Nicholas accepted delivery of his deed on the 7th of January. Because Nicholas had actual knowledge, in a state with a notice statute, he is deemed to have been put on notice of Karens claim is therefore considered superior to that of Nicholas
3. Rate-notice statutes:
A recording statute premised on protecting a bona fide purchaser for value without notice if he or she is the first to record the deed to real property.
Is to protect a bona fide purchaser for value without notice if he or she is the first to record the deed. This, if the subsequent purchaser has no notice of a prior purchasers claim if he or she is the first to record his or her deed, this subsequent purchaser has priority.
QUESTION: When was knowledge obtained with and without notice.
Bill of Sale
UCC Filing Statement
Personal Property affixed to the land that can be removed at the discretion of the former owner.
1. K closing
2. Devise inheritance
4. Adverse Possession
Contionous (Tolling) - § 10 years
Open and Notorious acknowledges that a person occupies the land for a specific period of time. This affects the marketability of the property. This affects the title of the property. Adverse Possession makes
Actual physical possession
Hostile w/owners consent
Tolling of the statute of limitations
Conveyance of property in adverse possession by K, a person can tack an interest in land
Land can be secured via tacking tactics
Must happen with the owners consent and knowledge.
Five plus 5 years for tacking will contribute to ownership
Must satisfy the 4 elements above in order to obtain an interest in property.
Person must occupy the property via occupancy of the land by physically
Conveyance via Gift
Statute of Frauds
MYLEGS is the acronym that necessitates a contract must be in writing.
Donee person who receives a gift
Must be in writing in order to convey ownership.
Y exceeding one year for performance
L interest in land
S sale of goods exceeding $500
Receiving property by inheritance
Two ways to receive property in inheritance
By will and without will
Decedant is the person who dies.
Testator is the person making the will
Intestate under the laws of intestacy, a spouse v children receive 50% of the estate and the children receive 50%. No wife then children receive remainder by representation.
In the absence of living family members, then the property escheats
Right of Election Share
If surviving spouse is not provided for under the will, then the surviving spouse will receive 1/3 of the estate under the will under new york state law. This allows the surviving spouse to receive intereste in land via an elective share. She can elect to receive by taking or elective .
She has from 6 months to 2 years to elect for her share. The maximum amount she can get when she elects is 1/3 of the estate. She has the right of election if she is not provided for under the will.
Court must examine the unknown trusts that exists in order to determine the worth of the interest in an estate the surviving spouse should receive. Survivor has the right of election.
Provides unlimited rights to property ownership
1. Fee Simple Absolute unlimited right to the property is assigned with this assignment.
2. Life Estate
3. Vested Remainder when a person or conveyee receives property after a life estate, he is called a vested remainder. Always follows a right of ownership without condition
4. Contingent Remainder ownership based upon a contingent condition imposed by the grantor who has primary fee simple absolute ownership rights
Conditions of the conveyance is stated in the deed
1. Estate for years more than one year lease
2. Periodic tenancy usually month to month
3. Tenancy at will-when a tenant freely occupies a land and both parties are freely in agreement in occupancy rights based upon the K or lease
4. Tenancy in sufferance hold over tenant
Joint ownership in property where two or more people have an interest in property. Must contain the following elements. Rights of survivorship is recognized
1. Joint tenancy Four requirements/unities
All undivided interest in the property. This is accompanied by rights of survivorship and must be specifically state in the Deed. If not stated, then it will be classified as a T/C. Equal ownership can be unequal.
2. Tenancy in common default type of concurrent estate where you do not have the rights of survivorship. Mortgage or any type of conveyance will sever this type of ownership. Default concurrent ownership when two or more persons own property. No joint rights of survivorship exists with this type of ownership. Each person has a different type percentage and share of an interest in property. They have an undivided share in the property. And Unities do not have to be satisfied.
3. Tenancy by the Entirety husband and wife purchase property together neither one of the parties may sell the property to another. Divorce is the only device that can sever a tenancy by the entirety. Upon decedents death, the mortgage can be paid. Right of survivorship is when the survivor obtains ownership rights. Rights of survivorship is recognized..
Partnership (General): - no protection against loses; person is personally liable due to this partnership
Protection is available only through a limited partnership. In order to get protection, you must file with the state due to the existence of certain statutes.
Limited Partner get protection where only what he has contributed get seized.
Limited partner is not personally liable.
General partnership is personally liable.
Limited partner cannot administer the daily operations of the partnership.. He is considered a silent partnership and you must file a limited partnership with the state. Failure to file means that you must file a Certificate of Limited Partnership with the state.
Corporation: You must file an article of incorporation with the state. Must consist of
Promoters create and initiate the formation of the corporation. Find shareholders to invest and create the corporation
Shareholders actual owners of the corporation. Have the power to hire the officers. Shareholders are not personally liable for debts. Piercing the veil (PCV) makes shareholders liable. This veil can be pierced if the shareholders (alter ego) under tort cases or contract, can become personally liable due to a debt of the corporation. Derivative action is what this represents. Uses an alter ego to take care of business whereby liability occurs. Court favors piercing the corporate veil in tort actions. Contract are subject to PCV to solve shareholder liability.
Board of Directors
Limited Liability Partnership has the characteristics of a corporation; must be filed in the AOInC. You are taxed as a corporation. Partnerships are not double-taxed.
By-laws procedureal guidelines that govern
Courts of justice as compared to courts of law which deal with damages.
Equity courts look for a just means to a dispute. New York has EQ to resolve disputes.
Separate all property acquired by either spouse prior to the marriage. It also includes income from property acquired by the spouse prior to the marriage that is difficult to separate. Also property acquired by gift, will or received through a personal injury award; that is considered separate property. The other spouse does not get to touch the persons property
Marital All property owned equally by the spouse, regardless of contribution.
Active or passive maintenance must be determined.
Form of ownership whereby property owner owns the interior of his unit or apartment an undivided interest in this unit. Owner is given a deed to the property at the closing and is responsible for the mortgage payment and property taxes.
Also have an undivided interest in the common elements of the property stairs, parking lot, hallways, etc.
Must be payment of the common areas due to common usage. This has a condo association comprised of a group of community owners.. Condo is created by statute and you have to file a Declaration of Condominium which is considered a Master Deed usually signed by the developer. This is always recorded.
Name of Condo
Number of unites in condo
What the limited condo areas are in the condo
Restrictions on the use of the condo incorporated in the deed
This conveys possession and not ownership rights.
If the deed is silent, condo association can create restrictions.
Condo association is also a corporation. It must also file by-laws and articles of incorporation
Executive board of the association is elected by unit owners. Two main functions.
1. create rules and make sure rules are enforced
2. maintain the common areas of premises
Must hire contractors for maintenance and must have Workers compensation insurance in accordance with workman compensation law. Must have liability insurance.
Can put lien on property for failure to make monthly payments.
A multi-unit building that is owned by a corporation. You become a shareholder and not an owner with long term lease with the coop. This is governed by state law.
Tenants are shareholders and the lease is evidence of their interest
All shareholders have a long term lease and the lease is a document evidencing the ownership interest in the coop. This is accompanied with a stock certificate. You need two of these documents in order to satisfy these requirement. The property is taxed as a whole. Each shareholder/tenant has to pay period a maintenance fee in the form of assessments in the building along with taxes and mortgage.
In order to become a tenant, you must become a shareholder in the coop.
You must receive approval from the coop association and the shareholders.
Covenants or restrictions make coops a private organization. Maintenance, taxes and mortgage will cover for the other shareholders when a person is delinquent. You portion would be increased for someone who doesnt pay.
Another type of ownership where you purchase the right to use real property for a limited and specific period of time each year. Contract must be in writing due to statute of frauds.
Must identify the number of units , total number
Zoning impact for changing from a residential to commercial property which is created by statute.
This is called a substantial change in circumstances when government has increased the control of an area.
Factors that are considered for area covnversion:
4. various real estate taxes
5. finish all 23 on page 64
Different of zoning ordinances
Deviate from strict compliance with a zoning ordinance. In order to be granted a variance, owner has t be shown compliance with the ordinance would be a hardship if he complies with the ordinance.
Permit allows you to do something for a specific period of time.
Grandfather clause something that existed prior to the enactment of the ordinance.