Definition
Tenancy in severalty is a form of property ownership where a single person or a single legal entity, such as a corporation, has complete and exclusive control over the property. This means that the owner has full discretion in making decisions about the property, including selling, leasing, or improving it, without requiring the consent of others. The term “severalty” comes from the idea that the property is “severed” from any form of co-ownership or joint ownership.
Examples
- Individual Homeownership: An individual buys a house in their sole name. They have complete control over the property and can make all decisions independently.
- Corporate Ownership: A company purchases a commercial building. The corporation as a legal entity has exclusive ownership and control of the building.
- Single-Person Business Ownership: A sole proprietor owns a piece of real estate used for their business operations. The property is in the proprietor’s name alone.
Frequently Asked Questions
What is the difference between tenancy in severalty and joint tenancy?
Tenancy in severalty involves ownership by one person or entity, giving them exclusive control over the property. In contrast, joint tenancy involves multiple owners who have equal shares and rights to the property, typically including the right of survivorship.
Can a business entity own property in severalty?
Yes, a business entity such as a corporation or an LLC can own property in severalty, wherein the entity is considered the sole owner.
What happens to tenancy in severalty ownership upon the death of the owner?
Upon the death of the owner in a tenancy in severalty, the property typically goes through probate and is distributed according to the owner’s will or state intestacy laws if there is no will.
Is tenancy in severalty common in commercial real estate?
Yes, tenancy in severalty is quite common in commercial real estate where properties are often owned by single entities, such as corporations, for business purposes.
Yes, property owned in severalty can be converted to another form of tenancy, such as joint tenancy or tenancy in common, by transferring ownership interest to other individuals or entities.
- Joint Tenancy: A legal arrangement where two or more people hold equal shares of a property with the right of survivorship.
- Tenancy in Common: A form of co-ownership where each owner holds a distinct, separately transferable interest without the right of survivorship.
- Sole Proprietorship: A business entity owned and managed by one individual with no distinction between the business and the owner.
- Legal Entity: An organization that has legal rights and obligations, such as a corporation, limited liability company (LLC), or trust.
Online References
Suggested Books for Further Studies
- “Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer
- “Principles of Real Estate Practice” by Stephen Mettling and David Cusic
- “Modern Real Estate Practice” by Fillmore W. Galaty, Wellington J. Allaway, and Robert C. Kyle
Fundamentals of Tenancy in Severalty: Real Estate Basics Quiz
### What does tenancy in severalty primarily mean?
- [ ] Joint ownership by multiple parties.
- [ ] Ownership by a landlord and a tenant.
- [ ] Shared ownership between friends.
- [x] Ownership by a single person or entity.
> **Explanation:** Tenancy in severalty refers to sole ownership where a single person or entity exclusively controls and owns the property.
### Can a corporation own property in severalty?
- [x] Yes, a corporation can own property in severalty.
- [ ] No, only individuals can own property in severalty.
- [ ] Only partnerships can own property in severalty.
- [ ] Corporations can only co-own property.
> **Explanation:** A corporation, as a legal entity, can own property in severalty, having exclusive control and ownership rights over the property.
### What happens to tenancy in severalty when the sole owner passes away?
- [ ] The property automatically becomes public property.
- [ ] The property goes to the nearest relative.
- [x] The property goes through probate and is distributed according to the will or state laws.
- [ ] The property is divided among friends.
> **Explanation:** Upon the death of the sole owner, the property goes through the probate process and is distributed according to the deceased's will or state intestacy laws.
### Is tenancy in severalty common in residential real estate?
- [x] Yes, it is common.
- [ ] No, it is rare.
- [ ] Only in rural areas.
- [ ] Only in urban areas.
> **Explanation:** Tenancy in severalty is common in residential real estate, especially where individuals prefer full control and sole ownership of their homes.
### What distinct advantage does tenancy in severalty offer?
- [ ] Shared decision-making authority.
- [ ] Increased rental income opportunities.
- [x] Exclusive control and decision-making power over the property.
- [ ] Joint asset appreciation.
> **Explanation:** The primary advantage of tenancy in severalty is that it provides exclusive control and decision-making authority over the property to the sole owner.
### How can a property owned in severalty be transferred to another type of tenancy?
- [ ] By destroying the current ownership documents.
- [x] By legally transferring an ownership interest to other persons or entities.
- [ ] By simply stating the intent to change in writing.
- [ ] By posting a public notice.
> **Explanation:** To change property ownership from severalty to another form of tenancy, the current owner must legally transfer part of the ownership interest to other individuals or entities.
### Which of the following scenarios best describes tenancy in severalty?
- [ ] A married couple owning a vacation home.
- [ ] Three partners sharing a commercial property.
- [x] A person owning and living in their own apartment.
- [ ] A family trust holding a rental property.
> **Explanation:** A person owning and living in their own apartment is a scenario of tenancy in severalty, which involves exclusive ownership by one individual.
### Is it possible for joint tenants to convert their ownership to tenancy in severalty?
- [x] Yes, one joint tenant can buy out the others.
- [ ] No, only corporations can do that.
- [ ] Only with court approval.
- [ ] Only upon the death of one joint tenant.
> **Explanation:** Joint tenants can convert their ownership to tenancy in severalty if one tenant buys out the shares of others, thus acquiring exclusive ownership.
### What key element is required for property to be considered under tenancy in severalty?
- [ ] At least two witnesses.
- [ ] A shared ownership contract.
- [x] Ownership by one person or entity.
- [ ] Complete property disclosure.
> **Explanation:** For property to be under tenancy in severalty, it must be owned by a single person or legal entity, ensuring exclusive control over the property.
### How does tenancy in severalty affect property management?
- [ ] It requires collaboration for all decisions.
- [x] It allows for unilateral decision-making.
- [ ] It imposes tax benefits for co-owners.
- [ ] It limits the authority of state governments.
> **Explanation:** Tenancy in severalty allows for unilateral decision-making by the sole owner, making property management streamlined and straightforward.
Thank you for studying tenancy in severalty, a fundamental concept in real estate ownership. Continue exploring more real estate principles and challenge yourself with our quizzes to master your knowledge!
