Real Estate

Real Estate

Real Estate

Air, water, land, and everything affixed to the land

Improvements

Man-made structures that are permanently attached to the land

Land

Surface of the earth, beneath the surface, all natural things permanently attached to the earth and all air above the surface of the earth

Physical characteristics of land

Immobility, indestructibility, and heterogeneity

Economic factors of land

Demand, utility, scarcity, transferability, and situs

Property

Item that is owned as well as a set of rights to the item enjoyed by the owner

Real property

Ownership of real estate and the bundle of rights associated with owning the real estate

Personal property

Not real estate and the rights associated with owning the personal property. These items are also called chattels or personality

Tangible property

Physical, visible, and material

Intangible property

Abstract, having no physical existence in itself

Types of property

Residential, commercial, industrial, agricultural, and special purpose

The right to use a property

use property in certain ways such as mining, cultivating, landscaping, and building on the property. Subject to local zoning rules and legality of the use.

The right to transfer interests in a property

Right to sell, bequeath, lease, donate, or aSign ownership rights. An owner can transfer some rights without transferring total ownership

Land can be severed into…

Surface rights, air rights, and subsurface rights

Water rights decided by…

Whether the state controls the water, whether moving and whether navigable

Doctrine of prior appropriation

State controls water usage and grants usage permits

Litoral rights

Concerns unmoving, navigable water /‘d abutting property owners own land to Hugh water mark. State owns underlying land

Riparian rights

Concerns property abutting flowing water

Groundwater rights

Rights to extract water in aquifers

Property and rights affected by actions of water

Accretion, erosion, avulsion, reliction, and alluvion

Fixture

A personal property item that has been converted to real property by attachemnet to real estate

Differentiation criteria

Intention, adaptation, functionality, relationship of parties, contract provisions

Trade or chattel fixtures

Personal property items temporarily attached to real estate in order to conduct business and to be removed at some point

Emblements

Plants, crops etc. considered personal property since human intervention is necessary

Conversion

Transforming real to personal property through severance or personal to real property through affixing

Government entities regulate the following aspects of real property interests

Bundle of rights, legal descriptors, financing, insurance, inheritance, and taxation

Federal regulation of real property rights

Real property usage, natural disasters, land description, and discrimination

State regulation of real property rights

Real estate license laws and qualifications

Real estate commissions establishment

Local regulation of real property rights

Levies real estate taxes and controls specific usage

Judicial regulation of real property rights

Applies case law and common law to disputes

Ownership of any combination of the bundle of rights to real property, including the rights to possess, use, transfer, encumber, and exclude

Interest in real estate

Owner’s interest is in a fractional part of the entire estate, NOT in a physical portion of the real property itself

Undivided and indivisible

Interest-holder enjoys rights of possession

Estate in land

A private interest-holder does not have the right to possess

Encumbrance

The interest-holder is not private and does not have the right to possess

Public interest

The right of the government to take private property for a necessary public use with just compensation paid to the owner

Eminent domain

The reversion of property to state ownership

Escheat

Duration of owner’s rights is undetermined

Freehold estate

Duration of rights is limited

Leasehold estate

Leasehold and freehold estates refereed to as…

Tenancies

Most common form of real estate and includes complete bundle of rights and the tenancy is unlimited with certain exceptions

Few simple estate

Highest form of ownership interest one can acquire in real estate

Fee simple absolute

Perpetual ownership provided the usage conforms to stated conditions. Can be determinable or condition subsequent

Fee simple defeasible

A freehold estate that is limited in duration to the life of the owner or other names person. Upon death of this person, the estate passes to the original owner or another named party

Life estate

Interest of a named party to receive estate after holder’s death

Remainder

Interest of previous owner to receive estate after holder’s death

Reversion

Full ownership interest created by agreements between parties, limited to the lifespan of life tenant or another named party

Conventional life estate

Upon death of life tenant, passes to remainderman or previous owner

Ordinary life estate

Upon death of third person, passes to remainderman or previous owner

Put autre vie

Created by state law as opposed to being created by a property owner’s agreement, focused to protecting the property rights of surviving family members upon death of the husband or wife

Legal life estate

Rights to one’s principal residence, protects against certain creditors

Homestead

Property acquired under dower laws and is owned by the surviving spouse for the duration of his or her lifetime

Dower and curtesy

Right to make a minimum claim to deceased spouse’s property in lieu of will

Elective share

Arises from the execution of a lease by a fee owner

Leasehold estate

Landlord

Lessor

Tenant

Lessee

T/F a leasehold estate is an item of personal property for the tenant

True

What are the four main types of leasehold estate?

Estate for years

estate from period to period

Estate at will

Estate at sufferance

A leasehold estate for a definite period of time with a beginning and an ending date

Estate for years

Lease term renews automatically upon acceptance of periodic rent

Estate from period to period

Tenancy for an indefinite period subject to rent payment and which is cancelable with notice

Estate at will

Tenancy against landlord’s will and without an agreement

Tenancy at sufferance

Conveys a leasehold interest or estate that grants the tenant the rights of exclusive possession and occupancy, exclusive use, quiet enjoyment, and profits from use during the lease term

Lease

Who is obligated to pay rent, maintain property condition, comply with rules and regulations, and return the property to the landlord at the end of the term in the same condition in which it was received?

Tenant

The right to receive rent, re-possess the property following the lease term and monitor the tenant’s obligations to maintain the premises

Leased fee estate

Non-possessory interests limiting the legal owner’s rights

Encumbrances

A right to use portion of another’s property

Easements

Dominant tenement’s right to use or restrict adjacent servir y tenement and attaches to the real estate

Easement appurtenant

Granted by necessity such as to landlocked owners

Easement by necessity

Negative easement in a shared structure

Party wall

A right to use property that does not attach to the real estate

Examples are utilities and railroads

Easement in gross

Not revocable or transferable and ends upon death of easement holder

Personal easement in gross

Granted to businesses and is transferable

Commercial easement in gross

Voluntary grant, court decree by necessity or prescription, eminent domain

Easement creation

Obtainable through continuous, open, adverse use over a period

Easement creation by prescription

Release, merger, abandonment, condemnation, change of purpose, destruction, and non-use of easements

Easement termination

Intrusions of real estate into adjoining property and can become easements

Encroachments

Personal rights to use a property and do not attach, are non-transferable, and are revocable

licenses

Conditions or covenants imposed on a property by deed or subdivision plat

Deed restrictions

Claims attaching to real or personal property as security for debt

Liens

Restrict free and clear ownership

Legal features of a lien

Voluntary or involuntary; general or specific; superior or junior

Lien types

Rank ordering of claims established by lien classification and date of recording

Lien priority

Rank over junior liens like real estate taxes, assessment liens and inheritance taxes

Superior liens

Rank by recording date and includes judgment, mortgage, vendor’s, utility, mechanic’s, other tax liens

Junior liens

Ownership of the bundle of rights

Legal title

a conditional right to legal title subject to an owner’s agreement with buyers and creditors

Equitable lien

How ownership is evidenced to the public

Notice or title

The two types of notices are…

Actual notice and constructive notice

Voluntary by grant, deed, or will, and involuntary by descent, escheat, eminent domain, foreclosure, adverse possession, or estoppel

Transferring title

Instruments of voluntary conveyance, by grantor to grantee

Deeds of conveyance

Legal title transferred upon competent grantor’s intentional delivery and grantee’s acceptance; in Torrens, title transfers upon registration

Delivery and acceptance

Grantor, grantee, in writing, legal description, granting clause, consideration, grantor’s signature, acknowledgement, delivery and acceptance

Validity

Granting clause

Premises clause

Type of estate

habendum clause

Restrictions on clause

Reddendum clause

Other property included in clause

Tenendum clause

Seizen, quiet enjoyment, further assurance, forever, encumbrances, grantor’s acts

Warrants