University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

378

Pages:

2
Author:

bratrochanter

Forms of Property Ownership and Related Legal Implications 1. Co-Ownership Forms Real property can be co-owned in multiple ways, each with unique rights and responsibilities:      Tenancy in Common: o Co-owners share equal possession and use, regardless of ownership percentage. o Income from the property is shared proportionally, and each owner must contribute to expenses. o Ownership interests are transferable during life or through inheritance. Joint Tenancy: o Like tenancy in common, this allows equal rights to use and income. o Unique to joint tenancy is the "right of survivorship," where upon one owner’s death, the surviving owner(s) automatically inherit the deceased's share. o Any transfer of interest by a joint tenant severs the joint tenancy, converting it to a tenancy in common. Tenancy by the Entirety: o Available only to married couples, this form includes a right of survivorship. o Neither spouse can transfer the property without the other's consent. o Creditors cannot claim the property based on one spouse’s debt alone. o Divorce converts tenancy by the entirety into tenancy in common. Community Property: o Recognized in certain states, this form views marital property as jointly owned, granting each spouse equal interest in property acquired during the marriage, except for gifts and inheritances. Condominium and Cooperative Ownership: o Condominiums: Individual ownership of a unit with shared ownership of common areas. o Cooperatives: Ownership via shares in a corporation that owns the property, granting a lease to occupy a specific unit. 2. Life Estates A life estate grants a person the right to use property for their lifetime. On their death, ownership either reverts to the original owner or passes to another designated individual. Life tenants can use the property but cannot cause permanent damage. 3. Easements An easement allows one party to use another’s property or restricts the owner’s use. Easements can be:   Affirmative: Granting a right to use, like a pathway across a neighbor's land. Negative: Preventing certain uses, like limiting the height of buildings to preserve a view. Easements appurtenant pass with the property upon sale, benefiting subsequent owners. In gross easements, however, are personal rights, which do not transfer with the property. 4. Restrictive Covenants Restrictive covenants are conditions imposed on property use, often found in neighborhood or subdivision agreements. They may limit modifications or the type of structures that can be built. 5. Property Owners’ Duties to Third Parties Property owners have a duty to ensure safety for those on their property, with varying obligations based on the visitor type (e.g., invitees, licensees, or trespassers). Negligence in maintaining safe conditions can lead to liability for injuries. 6. Ethical Considerations in Property Use Ethical property use extends beyond legal obligations, as demonstrated in situations where property boundaries or use are disputed, such as unauthorized dumping by a neighbor. Addressing issues respectfully promotes good community relations.