USA - FLORIDA Law and Practice Contributed by: Jeffrey R Margolis, Marc S Shuster, James L Berger and Evan Rosenberg, Berger Singerman LLP
were developed as a result of the growing interest in collateralised mortgage obligations (CMOs) as a conduit for investors investing in real estate mortgages. If a qualified entity elects REMIC status, it is no longer a taxable entity. The REMIC’s income is passed directly through to the REMIC’s interest holders. To qualify as a REMIC, substantially all the assets of the REMIC must be real estate mort - gages. The mortgages must also be transferred into the REMIC, either as part of its formation or within three months of its formation. Land or business trusts Land trusts, or business trusts, are allowed in some but not all states. In a land trust, both legal and equitable title to the property is held by a trustee, who holds the property for the benefi - ciary and only acts when directed by the ben - eficiary. Although the trustee holds actual title to the property, the beneficiary has the exclusive right to manage and control the property, to have possession of the property, and to receive pro - ceeds from the property. Joint estates Tenancy in common A tenancy in common gives two or more persons or entities an undivided fractional ownership interest in real property. Tenancies in common are typically governed by a tenants in common agreement. Other features of a tenancy in common are as follows: • the right of each co-tenant to possess the entire estate; • no right of survivorship, which means a deceased owner’s share passes to their heirs through probate; and
• the right of each co-tenant to unilaterally sell, mortgage or otherwise devise its tenancy in common interest. Joint tenancy A joint tenancy gives two or more persons or entities an equal and undivided right to use and possess a property. A joint tenancy generally features the right of survivorship, which means that, when an owner dies, the surviving own - ers automatically absorb the deceased owner’s share in the estate. Some states require the right of survivorship to be expressly provided in the deed. To form a joint tenancy, the owners must satisfy the four unities of ownership: • time, whereby each joint tenant must receive title at the same time; • title, whereby each joint tenant must receive title under the same instrument; • interest, whereby each joint tenant must receive the same equal share of ownership; and • possession, whereby each joint tenant must have an identical right of possession of the entire estate. Joint tenants cannot sell, mortgage, or otherwise dispose of their shares in the joint tenancy with - out the consent of all the joint tenants. If a joint tenant conveys its interest to a third party, then the joint tenancy is destroyed and a tenancy in common is formed. Tenancy by the entirety Tenancy by the entirety is similar to joint tenancy with a right of survivorship, in that the deceased owner’s interest in the real property is trans - ferred and vests automatically in the surviving joint owner. However, tenancy by the entirety is
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