Overview
Property ownership on the NY Real Estate Salesperson Exam covers how title is held (individually or with others), the rights associated with ownership, and the limitations placed on those rights. Understanding the distinctions between ownership forms, co-ownership structures, and encumbrances is essential, as these topics appear frequently on the exam. This guide organizes all key concepts clearly with definitions, relationships, and exam-focused tips.
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Forms of Ownership
Overview
Ownership can be held by one person (severalty) or multiple people (co-ownership). The form of ownership determines what happens to a deceased owner's interest, how the property can be transferred, and what rights each owner holds.
Ownership in Severalty
• Ownership in severalty = sole ownership by one individual or legal entity
• The term "severalty" comes from being severed (separate) from others
• A corporation holds property in severalty as a legal entity
- Property is unaffected by the death of shareholders due to the corporation's perpetual existence
Co-Ownership Forms
#### Joint Tenancy
• Two or more people hold equal, undivided interests
• Includes the right of survivorship — a deceased joint tenant's interest passes automatically to surviving joint tenants, bypassing probate
• Requires the Four Unities (TTIP):
- Time – interests acquired at the same time
- Title – interests acquired by the same instrument (deed)
- Interest – equal shares
- Possession – equal right to possess the whole property
• Severing a joint tenancy in NY: one joint tenant conveys their interest to a third party or to themselves, destroying the unity of time and title → converts to tenancy in common
#### Tenancy in Common
• Two or more people hold undivided interests (not required to be equal)
- Example: one owner holds 60%, another holds 40%
• No right of survivorship — deceased owner's interest passes to heirs or by will
• Each co-owner can independently transfer their interest
• Default form of co-ownership when no other form is specified
#### Tenancy by the Entirety
• Available exclusively to legally married couples in New York
• Both spouses hold equal, undivided interest
• Includes right of survivorship
• Neither spouse can convey their share without the other's consent
• Automatically terminated by divorce, death, or mutual agreement
Key Terms
• Right of survivorship – automatic transfer of a deceased co-owner's interest to surviving co-owners
• Probate – legal process of distributing a deceased person's estate; bypassed by survivorship
• Undivided interest – each co-owner has the right to use the whole property, not a specific portion
Comparison Table
| Feature | Joint Tenancy | Tenancy in Common | Tenancy by the Entirety |
|---|---|---|---|
| Equal shares required? | Yes | No | Yes |
| Right of survivorship? | Yes | No | Yes |
| Who can hold it? | Any persons | Any persons | Married couples only |
| Can one owner transfer freely? | Yes (severs tenancy) | Yes | No |
⚠️ Watch Out For
• Joint tenancy requires ALL four unities (TTIP) — if any one is missing, it defaults to a tenancy in common
• Conveying a joint tenancy interest does NOT require the other joint tenant's consent, but it destroys the joint tenancy
• Tenancy by the entirety is frequently confused with joint tenancy — remember it is married couples ONLY in NY
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Cooperative & Condominium Ownership
Cooperative (Co-op) Ownership
• A buyer does NOT purchase real property — they purchase:
- Shares of stock in the cooperative corporation
- A proprietary lease granting the right to occupy a specific unit
• Monthly charges = maintenance fees, which cover:
- Proportionate share of the building's mortgage
- Property taxes
- Operating expenses
• Co-op boards typically have strict approval processes for buyers
• Co-op owners are shareholders, not real property owners
Condominium Ownership
• Owner holds fee simple ownership of their individual unit
• Also holds an undivided interest in the common elements as a tenant in common with all other unit owners
• Receives a deed to their unit (unlike co-op buyers)
• Pays common charges/assessments for maintenance of common areas
#### Key Condo Documents
| Document | Purpose |
|---|---|
| Declaration (Master Deed) | Legally creates the condominium; recorded with the county clerk |
| Bylaws | Governs day-to-day rules, use, maintenance, and governance |
| CC&Rs | Covenants, Conditions & Restrictions — rules binding all owners |
Key Terms
• Proprietary lease – a co-op shareholder's right to occupy a specific unit
• Common elements – shared areas (hallways, lobbies, pools) owned collectively by all unit owners
• Declaration/Master Deed – foundational document that legally creates a condominium
• Maintenance fees (co-op) vs. common charges (condo) – both cover shared expenses, but the nature of ownership differs
⚠️ Watch Out For
• Co-op buyers receive stock and a lease — NOT a deed. This is one of the most tested distinctions
• In a condo, the owner holds fee simple — this is real property ownership with a deed
• The declaration creates the condo legally; the bylaws govern operations — know the difference
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Property Rights & Interests
Fee Simple Absolute
• Highest form of real property ownership
• Complete and indefinite ownership
• Unconditional right to use, sell, or pass on the property
• No limitations on duration
Life Estate
• Ownership limited to the duration of someone's life
• Life tenant – holds the property during their lifetime
• Upon the life tenant's death:
- Property passes to the remainderman (if named), OR
- Reverts to the grantor (reversion)
• Life tenant cannot commit waste (actions that damage the property's value)
Bundle of Rights
The rights associated with real property ownership — often tested by asking what ownership includes:
• Possess – right to occupy
• Use – right to use as desired (within legal limits)
• Enjoy – right to quiet enjoyment
• Exclude – right to keep others off the property
• Dispose (transfer) – right to sell, lease, or give away
> 💡 Mnemonic: PUEED (Possess, Use, Enjoy, Exclude, Dispose)
Real vs. Personal Property
| Real Property | Personal Property (Personalty) |
|---|---|
| Land and anything permanently attached | Movable property not affixed to land |
| Transferred by deed | Transferred by bill of sale |
| Examples: buildings, trees, built-in appliances | Examples: furniture, vehicles, portable appliances |
Fixtures
• Fixture = personal property permanently attached to real property → classified as real property
• Tests to determine if something is a fixture (MARIA):
- Method of attachment
- Adaptation to the property
- Relationship of the parties
- Intention of the parties
- Agreement of the parties
• Examples: built-in appliances, heating systems, ceiling fans (if wired)
Adverse Possession (NY)
A person can claim ownership of land by meeting ALL requirements:
• Open – visible, not hidden
• Continuous – uninterrupted for at least 10 years in NY
• Exclusive – not shared with the true owner
• Notorious – widely known or obvious
• Hostile – without the owner's permission
Key Terms
• Fee simple absolute – highest, most complete form of ownership
• Life estate – ownership limited to a lifetime
• Remainderman – person who receives the property after a life tenant dies
• Reversion – property returns to grantor upon end of a life estate
• Fixture – personal property converted to real property by attachment
• Adverse possession – acquiring title through long-term, unauthorized occupation
⚠️ Watch Out For
• Life tenants cannot sell fee simple — they can only convey what they have (their life interest)
• Adverse possession requires 10 years in NY — memorize this specific timeframe
• Fixtures transfer with real property unless specifically excluded in the sales contract — disputes over fixtures are common exam scenarios
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Property Restrictions & Encumbrances
Easements
An easement is a non-possessory right to use another's land for a specific purpose.
#### Easement Appurtenant
• Benefits an adjoining parcel (the dominant estate)
• Burdens another parcel (the servient estate)
• Runs with the land — transfers automatically with the property
• Example: a neighbor's right to cross your property to reach a public road
#### Easement in Gross
• Benefits a specific person or entity (e.g., a utility company), NOT an adjoining parcel
• No dominant estate
• Generally does not run with the land
• Example: a utility company's right to run power lines across private property
| Feature | Easement Appurtenant | Easement in Gross |
|---|---|---|
| Benefits whom? | Adjoining parcel (dominant estate) | Person or entity |
| Dominant estate? | Yes | No |
| Runs with land? | Yes | Generally no |
Deed Restrictions (Restrictive Covenants)
• Private limitations on land use written into a deed
• Run with the land — bind all future owners
• Enforceable in NY unless they violate:
- Fair housing laws
- Public policy
• Example: a restriction prohibiting commercial use in a residential neighborhood
Liens
• A lien is a financial encumbrance that secures a debt against a property
• Does NOT prevent ownership but clouds title
• Must typically be satisfied (paid off) before or at closing
• Types of liens:
- Mortgage lien – lender's claim until mortgage is paid
- Tax lien – government claim for unpaid taxes (generally takes priority over all others)
- Mechanic's lien – claim by contractors/suppliers for unpaid work
- Judgment lien – court-ordered lien against a debtor's property
#### Mechanic's Lien (NY)
• Filed by contractors, subcontractors, or suppliers who provided labor or materials but were not paid
• Must be filed within specific timeframes in NY (varies by type of claimant)
• Attaches to the property, not just the owner who ordered the work
Key Terms
• Encumbrance – any claim, lien, or restriction that affects title or use of property
• Dominant estate – property that benefits from an easement appurtenant
• Servient estate – property burdened by an easement
• Lien – financial claim against property
• Cloud on title – any encumbrance or defect that makes title unclear
• Mechanic's lien – filed by unpaid contractors/suppliers
⚠️ Watch Out For
• Easement appurtenant vs. easement in gross: the key distinction is whether an adjoining parcel benefits (appurtenant) or a person/entity benefits (in gross)
• Deed restrictions cannot discriminate — any racially restrictive covenant is unenforceable under fair housing law, even if it's in writing
• Tax liens have priority over most other liens — know lien priority for the exam
• A lien does not mean the owner loses the property — it simply encumbers the title
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Homeowners Association (HOA) & Planned Communities
HOA Overview
• A homeowners association (HOA) is a governing body in a planned community or condominium
• Authority includes:
- Enforcing CC&Rs (Covenants, Conditions & Restrictions)
- Collecting assessments (dues) from members
- Maintaining common areas
• Membership and compliance are mandatory upon purchase — buyers are bound by the rules
• HOA rules cannot override state or federal law (including fair housing laws)
Key Terms
• HOA – governing body of a planned community or condo
• CC&Rs – rules and restrictions binding all property owners in the community
• Assessments – fees paid by HOA members for common area maintenance and operations
• Common areas – shared spaces maintained by the HOA
⚠️ Watch Out For
• HOA membership is not optional — purchasing in an HOA community means accepting all rules and financial obligations
• HOAs can place liens on property for unpaid assessments — treat HOA dues like a financial obligation on title
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Quick Review Checklist
Use this checklist before your exam to confirm mastery of the most critical points:
• [ ] I can name and distinguish all four forms of ownership: severalty, joint tenancy, tenancy in common, tenancy by the entirety
• [ ] I know the Four Unities (TTIP) required for joint tenancy: Time, Title, Interest, Possession
• [ ] I understand that tenancy by the entirety is for married couples only in NY and neither spouse can convey independently
• [ ] I know a joint tenancy can be severed by conveyance, converting it to a tenancy in common
• [ ] I can explain that co-op buyers receive stock + a proprietary lease, NOT a deed
• [ ] I know condo owners hold fee simple in their unit plus an undivided interest in common elements
• [ ] I can identify the declaration (master deed) as the document that legally creates a condo
• [ ] I understand the bundle of rights: possess, use, enjoy, exclude, dispose
• [ ] I know a fixture is personal property converted to real property by permanent attachment
• [ ] I know adverse possession in NY requires 10 years of open, continuous, exclusive, notorious, and hostile use
• [ ] I can distinguish easement appurtenant (benefits a parcel) from easement in gross (benefits a person/entity)
• [ ] I understand that deed restrictions run with the land but cannot violate fair housing laws
• [ ] I know a lien is a financial encumbrance that does not prevent ownership but clouds title
• [ ] I know tax liens generally have priority over other liens
• [ ] I know that mechanic's liens can be filed by unpaid contractors, subcontractors, or suppliers in NY
• [ ] I understand that HOA membership is mandatory upon purchase and HOAs can enforce CC&Rs and place liens for unpaid assessments
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Study Tip: On the NY exam, pay close attention to the specific words used in questions — "married couple," "equal shares," "right of survivorship," and "deed" vs. "stock" are all critical distinctions that point to specific correct answers.