Real Property

property

signifies dominion or right of use, control and disposition which one may lawfully exercise over things, objects, or land

what is the dividing line between property

real property and personal property

real property

refers to land-dirt and everything over it and under it-structures, improvements, minerals, water (legal protection of interests in real property create incentives to use resources efficiently)

property rights (3)

ownership (except for plentiful resources), exclusive use (owner incurs cost of use), transferability (voluntary exchange leads to most productive use)

what is the total US agricultural land

880.1 million acres (580 milli private, 300 milli federal-agency)

what is the total developed land + how much of the population lives there

70-75 million acres, 3% of total land area, 75% of the population

Review Land Measurements (okay)

okay

surface

right of landowner to use, enjoy, develop, or occupy the land

subsurface

rights to the earth located beneath the surface of the land

air

rights to air space above the property

what plant life & vegetation is considered real property

growing on the surface of the land includes natural + cultivated

when land is sold what plant life & vegetation is included

any plant life growing on the land unless the parties agree otherwise

when is plant life & vegetation considered personal property

when it is severed from the land

personal property

things movable, property that consists of tangible property such as automobiles, furniture, inventory, and intangible property such as securities, patents, copyrights

fixtures

goods that are affixed to real estate so as to become part of the real estate

examples of when personal property is so closely associated/attached with real property that it becomes a part of it (5)

cabinets, carpeting, doorknobs, storage building, fences

are fixtures included in the transfer of the real estate

yes unless otherwise agreed, if agreement is silent the courts will determine if the item can be removed without causing substantial damage to the real property

in Texas is an engagement ring considered personal property

gifts given in contemplation of marriage

how does Texas decide wether an engagement ring must be given back

who is at fault and whether family heirloom

bundle of rights (4)

possession, control, enjoyment, disposition

possession

right to occupy land

control

right to change or alter the physical characteristics of the property

enjoyment

right to enjoy the land without interference

disposition

right to convey or otherwise transfer the land

legal description

written description of real property that identifies a specific parcel of land with sufficient certainty so that it can be located and distinguished from all other property

what is a legal description used in (5)

deeds, mortgages, surveys, title documents, and court proceedings to identify land

why is a legal description important (4)

establishes exactly what property is being conveyed, required in deeds and many real estate docs, helps prevent boundary disputes, allows title companies, lenders, surveyors, and courts to identify the property

metes and bounds

begin at some geographic point and trace boundaries by reference to identifiable permanent objects or locations until closed back at the point of beginning

courses and distances

traces boundaries in feet from an identified starting point

lot and block (4)

if real estate is located in a subdivision, it will typically refer to one or more lots, the block(s) on which the lots are located, the subdivision name, and the county and state

lot and block exp for 119 N. Strawberry, LBK, TX 79416

Lot 22, Block A of the Orchard Park Addition LBK County, TX

each township is ___ ____ miles and contains ____ sections (one mile square)

6 square, 36

sections are numbered _____ beginning in ____ corner and ending in ____ corner

consecutively, NE, SE

each section contains _____ acres

640

how is a legal description read

right to left

fee simple absolute

complete ownership of land, unlimited in duration, with no conditions attached. it is the default estate conveyed in TX unless the deed expressly states otherwise

In TX, the simple phrase, “____ ____, ___, ____ _____ __ ______” is sufficient to pass fee simple absolute unless otherwise limited by express words

grantor grants, sells, and conveys to grantee

“so long as”

fee simply determinable

“on condition that'“

fee simple subjective to condition subsequent

ends at someone’s death

life estate

leasehold

term estate

words of conveyance (3)

identify the grantor’s intent to convey, identify the grantee, specify the estate being conveyed (fee simple, life estate, etc.)

life estate

an interest in the land that exists only for the duration of a life - usually the holders. once that life ends, the land passes to someone else

the life estate (words of conveyance)

from O to A for life

life estate holder/tenant

a life estate gives the holder (tenant) the right to live in and use the property during their lifetime

does the life estate holder assume all financial responsibility for the property

yes

must the life estate holder maintain the property in good condition so that the remainderman may put the property to full use when their rights take effect

yes

may the life estate holder use the property in a manner that damages or destroys its value

no

remainderman

the person(s) who get the property when the life estate termiantes

remainder interest (words of conveyance)

from O to A for life, then to B

reversionary interest

reverts back to original grantor

revisionary interest (words of conveyance)

from O to A for life

co-ownership of land (3)

tenancy in common, joint tenancy, community property

tenancy in common (3)

each owner owns an undivided interest in the whole, each owner’s interest may be sold or mortgaged, upon death an owner’s interest passes in accordance with will or by intestacy

what does tenancy in common ensure

each owner’s interest passes to his or her heirs instead of to the surviving co-owners

joint tenancy (3)

each owner owns an undivided interest in the whole, each owner’s interest may be sold or mortgaged, upon death owner’s interest passes to surviving owner(s)

what is joint tenancy created by

words of conveyance

is presumption against joint tenancy

yes

what is a popular form of ownership in family settings

joint tenancy with right of survivorship

what is community property in marriage

all property acquired during marriage is owned equally by spouses

what remains separate property in a marriage

property acquired before marriage

are gifts + inheritance separate property in marriage

yes

is income from separate property, separate property in marriage

no, community property

what legalizes common law marriage

agreed to be married, after agreement live together as husband and wife, represent together they are married

agreed divorce

is agreed if you and your spouse agree about all the issues are are both willing to sign divorce forms

annulment

ends a marriage that wasn’t valid to begin with

grounds for annulment (8)

intoxication, impotence, fraud, incest, bigame, underage, duress, or force

are property taxes locally based + administered

yes

property tax code defines real property to be (6)

land, mines or quarries, standing timber, minerals in place, improvements, and any other ownership interest in real property

is a property tax determined by the value of the property

yes

tax rate

the dollar amount of tax a person will pay for each dollar amount of property value owned

largest sources of tax revenue in Texas (5)

sales & use tax, franchise (business) tax, motor vehicle & rental tax, oil production tax, natural gas production tax

what appraisal technique substantially reduces taxation of land that qualifies for agricultural appraisal

certain kinds of farm and ranch land by appraisal based on the land’s capacity to produce agricultural products (productivity value) instead of at market value

real property tax exemptions (3)

homestead, veterans, charitable/religious/education

rollback penalty

land that has had an ag use exemption changes use, subject to a penalty of the difference in ag use value and fair market value of land for 3 years

promissory note

a promise to repay a sum of money

deed of trust

security interest in real property

deed of trust involves what 3 parties

lender, borrower, trustee

what does a promissory note contain (6)

loan amount (principal), interest rate, repayment schedule, loan terms, what happens if borrower defaults, any prepayment penalties

if borrower does not repay loan, what does a deed of trust do

gives the lender the legal right to foreclose and sell the property

one major reason to use a deed of trust

allows for non-judicial foreclosure

typical provisions in deeds of trust require the borrower to (6)

keep property in good repair and avoid waste, maintain improvements, comply with laws/regulations, maintain insurance coverage, pay property taxes/assessments, avoid actions that diminish the value of the property

3 kinds of deeds

general warranty, special warranty, quitclaim

deed

document that transfers ownership of real property

general warranty deed (highest quality)

seller warrants against defects arising at any time before the transfer (seller owns property, can convey, will defend against third party claims)

special warranty deed

grantor warrants the title against defects that arose only after the grantor acquired the land (wary of potential environmental problems)

quitclaim deed (lowest quality)

grantor merely transfers whatever interest the grantor has in the property without warranting against title defects

correction deed

used to fix mistakes in a previously filed deed

trustee’s deed/sheriff’s deed

used in foreclosure or by a trustee under a deed of trust, typically no warranties or extremely limited warranties

transferring ownership of deed

deed is not effective in transferring land from buyer to seller until it has been delivered (physically, recording) from the grantor to the grantee

contract for deed

method of seller financing in which the seller agrees to transfer title to the buyer only after the buyer has completed all required payments under the contract

earnest money contract

the doc that creates the binding agreement between the buyer + seller for the purchase + sale of real property

getting to closing (9)

purchase/sale of agreement, earnest money receipt, option agreement/option fee notice, title commitment (TDI form t-7), survey, seller’s disclosures, HOA documents, inspections/reports, appraisal