Property isn’t property without the concept of ownership. If nobody owns something, it isn’t property, it’s just a thing.
That being said, it’s not that simple determining what property is and isn’t. Real Estate Agents deal with Real Property as opposed to Personal Property, and there are multiple kinds of Real Property that have evolved over the years, mainly from the various levels of ownership deeds.
Rental properties are usually rented for monthly periods, but sometimes are seen rented for longer or shorter periods, with the shortest usually occurring within Hotels and Motels, temporary rental properties generally rented to persons not planning to make a residence within the property.
Rentals generally cost somewhere between hundreds and thousands of dollars, excluding some hotels/motels, which are cheaper, and in some rare areas, where you may find rentals that are more expensive. The price generally fluctuates per area, as well as due to external and internal variables.
There are three types of leases.
- A Direct Financing Lease
- A Sales Type Lease
- An Operating Lease or a Sublease
Misunderstanding Between “Rent” and “Lease”
Rent is just the amount paid from the renter/lessee to the landlord/lessor, whereas the Lease is the actual form of agreement that the two sides enter into. However, the terms “rent” and “lease” have received different popular connotations, with the latter being more “respectable” than the former, largely from the confusion between a lease and a leasing option, which is an addendum added onto the contract to allow the renter/lessee to buy the property outright at a time during the contract, usually at its expiration.
Condominiums, or “condexed property” is a stage of ownership between the other forms of ownership and joint ownership. In condominiums, you have ownership similar to that of a lease, mortgage, or “fee” ownership on the property that you are residing in, but your property also comes with an area owned jointly by other people that own other properties known as a common area. Common areas can be streets, fields, lakes, hockey rinks, whatever. The key to common areas lies in two points.
- You are charged a fee for common areas, similar to rent/lease, for that ownership.
- You own 100% of the common area or any services provided by the landlord receiving those fees, but so does everyone else living within the condominium development.
Condominiums are often confused with townhouses, which is a form of residential architecture that is often condexed. A condominium can be any form of housing, or for that matter, any form of anything, that includes several properties and a common area jointly owned by the owners of those properties.
You could condex a hot dog if you wanted to (the hot dog is the common area, and divide up the bun between a few people who all own the hot dog), but I really don’t think anybody would want to.
In theory, assets of governments are also condexed. You pay the fee (taxes), and you usually have access to the common areas (parks, streets) or services paid for by the fees (police, fire fighters, etc.), although the analogy doesn’t always fit precisely, there are some things your taxes pay for that you don’t have direct access to. (Military, etc.)
The word mortgage comes from the French term “dead promise”. In theory, it’s a stage of ownership somewhere between Leasing and a form of “fee” ownership, although often mortgages are entered into with the expectation that they will end with the mortagor (the person paying the mortgagee to live on the property) becoming a complete owner of the property if the mortgage has been paid.
During the term of the mortgage, the mortgagor holds ownership of use and title, but the ownership is not an estate for years, but rather an estate at sufferance until the mortgage has been paid in full.
Fee Simple ownership is the ownership that most people think of when they think of ownership. You have the right to use it, you have the right to title, nobody else can claim the title or use or put any hindrances on that right, excluding the government or if you have creditors who will claim the property in regards to something you owe them but haven’t paid yet (see Credit)
Once you pay Uncle Sam his common area fees, er, taxes, and pay off any creditors you may have, pat yourself on the back and plant your flag, you are the proud and complete owner of property.
Fee Simple Determinable
Fee Simple Defeasable
A quit claim deed is a type of deed where a grantor, a person who owns an interest in a property, transfers all his interests to someone else. The grantor offers no guarantees about the title to the recipient, who is called the grantee. A quit claim deed is often used to clear up problems with a title or when someone wants to use a simple method to give up all interests in a property.
Quit Claim Deed Uses
Mary inherited a property and shares ownership with her brothers and sisters. Mary sells her share to her brother and uses a quit claim deed to transfer all of her rights in the property to him.
A couple divorces. The husband uses a quit claim deed to transfer all of his ownership rights in a property to his wife.
During a title search the researcher finds out that, because of an error, a previous owner never relinquished his rights to a property. That puts a "cloud" or "defect" on the title, two terms that indicate the current owner isn't the only person with ownership rights in the property. The mistake is corrected by asking the previous owner to sign a quit claim deed that transfers all rights in the property to the current owner.
Quit Claim Limitations
A quit claim transfers only the rights of the person signing the deed. It does not guarantee that other people don't have an interest in the property. If there are other owners, their ownership is not affected by the quit claim.