Exam 1 Real Estate

Real Estate

not just a building but vacant land as well. Physical assets

Real Property

Real Estate + rights associated (real estate= land + buildings)

Property Rights

Anything that can be owned or possessed

Legally enforceable claims (Ex. Neighbor starts parking in your driveway bc it is closer to his house. can you tell him to leave?)

The legal system recognized and protects ownership rights

Ex: Yes, because of legally enforceable claims

Protected from arbitrary interference (1 & 2)

1. Other people generally cant take away your ownership rights

2. subject to legal limitations like: public health, safety, welfare

Property Rights: (1-3)

Rights to both tangible and intangible property

1. possession

2. Enjoyment

3. Disposition

What is land and with what extensions

Land= surface of earth, extended to airspace or subsurface.

• Both can effect value of the property

Fixture

A personal item that has become attached to real property in such a way that law treats it as part of the real property. Ex: chandelier

4 Rules for identifying a fixture

1. Manner of attachment: removal causes damages

2. Character of the article and manner of adaption: custom designed

3. Intention of parties: intention is permanent

4. Relation of parties: trade/agricultural fixtures + items install by residential tenant

Relation of the parties for landlord- tenant relationships

Because the tenant does not own the building. Trade= an item tenants install. If a tenant does damage to a building they must repair

Estate

An interest that includes exclusive possession

A lease that rolls over from 1 period to the next with no set end date

most common is monthly, notice is required to terminate the tenancy

A fixed term lease with a predetermined end date (Leasehold estate)

• Must be written if for more than one year

• automatically ends when the stat term expires

• no notice is required to terminate at the end of the lease term

Leasehold estates

tenancy for years, periodic tenancy, tenancy at will (w/o any renewal for a lot of periods), tenancy at sufferance (lease ends but have not moved out)

Easements

The right to use land for a specific and limited purpose. Utility: right to install and maintain. Easement appurtenant: follows the land

Easement appurtenant vs. easement in gross

Easement appurtenant: benefits a specific property and runs with the land.

Easement in gross: benefits a specific individual or entity not tied to any particular property

Lien

Legal claim against property that secures payment of a debt

Priority of liens

1. property tax liens

2. mortgages

3. other judgment liens

Co- ownership

occurs when 2 or more people own interests in the same property. Ownership does not equal occupancy

Direct co-ownership (TIC, tenancy in common)

• multiple owners of same fee simple interest

• No right of survivorship

Joint tenancy for husband and wife

Allows them both to hold 100% interest in the property as a single, legal entity

Elective share

a modern form of ownership interests from marriage

• Testate: dies with a will

• Intestate: dies w/o a will

• If your spouse dies and leaves a will that gives you less than the amount the law allows you can instead claim your statutory elective share instead

Riparian rights

owners whose land borders a natural body of water generally have the right to make reasonable use of the water

Coveyance

transfer the legal ownership (or a property interest ) of a property to another individual

Grantor

person or entity giving or transferring the property

Grantee

person or entity receiving the property

Recital of consideration

what was given in exchange for the coveyance

Traditional recital

the exact amount should appear on purchase/sale agreement or closing documents

Word of coveyance

Conveys and warrants to

Covenants

legally binding promises made by the grantor

convenant of seisin

grantor owns the property and has the right to transfer it (depending on how broad or legally significant the covenants are the type of deed is different

Covenant against encumbrances

no undisclosed liens, easements, or other encumbrances

convenant of quiet enjoyment

no one with a superior title will interfere with the grantees ownership

Habendum clause

describes the estate or interest being granted

Exception and reservations clause

Identifies interests excluded from the conveyance or retained by the grantor.

• Exceptions: existing rights or claims not transferred

• reservations: new rights retained by the grantor

General warranty deed

full chain of title coverage, defend grantee generally, for residental usage (3 types of convenents: seisin, quiet enjoyment, encumbrance)

Special warranty deed

warranty during grantors ownership only, for commerical sales and trust transfers. Similar to general warranty deed but only for the issue diring the grantors ownership period

Quitclaim deed

no warranties and conveys granotrs interest if any, for family transfers or title corrections

with intestate, there is no will and the state has laws the determines who inherits it, what is that called?

descent

judicial deed

a deed that results from a court proceeding

Judicial forclosure

cant oversee the forclosure, house is not sold at a public sale

Nonjudicial foreclosure (power of sale)

Trustee handles the foreclosure according to the state law, property is sold at a public sale

Easement by prescription

Someone gains a legal right to use part of another persons land after using it openly without permission and continuously

Adverse possession

someone may gain ownership of land by possessing it openly, actually, and without the owners permission for many years

Race statute

the buyer record first wins

Notice statute

if the second buyer is a bona fide purchaser he wins (BFP= no notice + pays a fair price

Race notice statute

If the second buyer is a bona fide purchaser and records first he wins

Two main forms of title evidence

1. title abstract with attorneys opinion: complied history of the property title based on public records

2. title insurance commitment: title insurance company searches and examines the records and issues a title insurance commitment

Monopoly

misallocate resources by overpricing goods and services and producing less output than is efficient from society’s view

Building codes

rules that tell people how buildings must be designed and constructed to be safe

Zoning

Gov also has a say on what you can do with a piece of land

Present Value

An amount at time zero

Future Value

An amount at any future time point

Lump sum

a one time receipt or expenditure occurring in a given period

Ordinary annuity

a fixed amount of money paid or received at the end of every period

Compounding

calculation of future values

Discounting

calculation of present values

Annuity due

a fixed payment at the beginning of every period. Ordinary annuity x (if interest rate)

Military aircraft repeatedly flew at very low altitudes over the causby family property creating severe noise and substantially interfering with their use and enjoyment of the land. As a result the owners sued the federal government

Inverse condemnation (owners initiate/ plantiff)

United States vs. Causby

The dispute concerned whether the city of detroit could sell or develop the the property (golf course) without violation the deed restriction requiring the property to be used as a public golf course

Free simple condition (condition needs to be met)

City of Huntington Woods vs. City of Detroit

A large parcel was originally owned by one owner and was later divided into two parcels. One parcel was subsequently foreclosed on and transferred to a different owner, leaving the other parcel without direct access to a public road. As a result, the plaintiff sued the defendant regarding the right to an easement

Implied easement (from necessity/ long standing use when land is divided)

Legal dispute between two landowners in Aetna Township MI

A road (beach drive) running between the property owners lot and the shoreline of lake charlevoix led to the owners to sue the county road commission over their riparian rights. The dispute primarily concerned the characteristics and legal nature of beach drive

Dedication

A legal dispute between landowners and the county road commission in lake charlevoix

As part of the construction of the gordie howe international bridge linking detroit and windsor canada the michigan department of transportation filed cases to acquire privately owned land that was subject to title disputes.

Eminent domain/ condimation (gov initiates)

constructing the gordie howe international bridge