Unit 10: Interest in Real Estate

Principles of Real Estate Texas I

Ad valorem tax

A tax levied according to value; generally used to refer to real estate tax.

Allodial System

A system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted with the feudal system. In the United States, land is held under the allodial system.

Appraisal Review Board

A group of people who hear appeals concerning assessed valuations for tax purposes and recommend or deny changes in vales shown of record.

Assessment Roll

The public record of the assessed values of all lands and building within a specific area.

Attachment

1. the act of taking a person’s property into legal custody or by writ or other judicial order to hold it available for application to that person’s debt to a creditor.

Defeasible Fee Estate

An estate in which the holder has a fee simple title that may be divested on the occurrence or nonoccurrence of a specified event. The two categories of defeasible fee estates are fee simple determinable and fee simple subject goa condition subsequent.

Determinable Fee Estate

A fee simple estate in which the property automatically reverts to the grantor upon the occurrence of a specified event or condition subsequent.

Easement

A right to use the land of another for a specific purpose, such as for a right-of-way or utilites

Easement Appurtenant

An easement that passes with the land on conveyance

Easement by implication

An easement that arises when parties’ action imply that they intent to create an easement

Easement by necessity

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over grantor’s land.

Easement by prescription

An easement acquired by continuous, open, uninterrupted, exclusive, and adverse use of the property for 10 years.

Easement in gross

An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner; for example a utility easement.

Eminent domain

The right of a government or public entity to acquire property for public use; the entity must make a good-faith effort to acquire the real property through direct negotiation and purchase from the owner.

Encroachment

A building or some portion of it— a wall or fence. for instance— that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or street or alley.

Encumbrance

Any lien (such as mortgage, tax, or judgement lien) or easement or restriction on the use of the land that may diminish the value of a property; a cloud against clear, free title to property.

Equitable lien

A lien arising out of common law.

Equitable right of redemption

The right to redeem a property before a foreclosure sale by paying the full debt plus interest and accrued charges

Escheat

The reversion of property to the state in the event the property is abandoned or the owner dies without leaving a will and has no heirs to whom the property may pass.

Estate in land

The degree, quantity, nature, and extent of interest that a person has in real property.

Estate taxes

Federal taxes on a decenden’s real and personal property.

Federal judgement lien

Lien obtained by the United States or an agency, department, commission, board, or other U.S. entity that affects all real and personal property of the judgement debtor.

Fee simple

The maximum possible estate or right of ownership of real property, continuing forever. Sometimes referred to as a fee or fee simple absolute.

Fee simple subject to a condition subject

An estate conveyed “provided that or “ if” it is used for a specific purpose. If it is no longer used for that purpose, it reverts to the original grantor or his heirs by their exercise of the right reentry

Feudal system

A system of ownership usually associated with precolonial England in which king or the other sovereign was the source of all rights. The right to possess real property was granted by the sovereign to an individual as a life estate only. On the death of the individual, title passed back to the sovereign, not to the decenden’s heirs

Financing statement

Gives notice of security interest and must be recorded.

Freehold estate

An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.

General contractor

A construction specialist who enters into a formal construction contract with a landowner to construct a real estate building or project.

general lien

The right of a creditor to have all of debtor’s property— both real and personal— sold to satisfy a debt.

Grantee

Grantor

Groundwater rights

Water under the earth’s surface below the saturation point and used by a property owner through the rule of capture.

Homestead

Land that is owned and occupied as the family home. In Texas, homestead property is protected or exempt from forced sale by creditors for payments of most debts. with several exceptions

Inheritance taxes

State-imposed taxes on a decenden’s real personal property.

Involuntary lien

A lien that arises by the action of another, such as a judgement lien.

IRS tax lien

A general lien imposed by the IRS for the nonpayment of income taxes

Judgement

The formal decision of a court on respective rights and claims of the parties to an action or suit. After a judgement has been entered and recorded with the county clerk, it usually becomes a general lien on the property of the defendant.

License

1. A privilege or right granted to a person by a state to operate as a real estate broker or sales agent.

2. The revocable permission for a temporary use of land— a personal right that cannot be sold.

Lien

A right given by law to certain creditors to have debts paid out of the property of a defaulting debtor, usually by means of a court sale

Life estate

An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person.

Littoral rights

1. A landowner’s claim to use water in large navigable lakes and oceans that are adjacent to the property.

2. The ownership rights to land bordering these bodies of water up to the mean vegetation line

Mechanic’s lien

A statutory lien created in favor of contractors, laborers, materialmen, and others (including architects, engineers, or surveyors) who have performed work or furnished materials in the erection or repair of a building.

Mortgage (deed of trust or purchase money) lien

A lien or charge on the property of a mortgagor that secures the underlying debt obligations

Police power

The governments right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, morals and welfare.

Prior Appropriation

A concept of water ownership in which the landowner’s right to use available water is based on government-administered permit system.

Priority

The order in which unpaid debts or obligations will be satisfied if the property goes through a court sale

Remainder interest

The future interest in an estate that takes effect after the termination of another estate, such as a life estate; on the death of the life estate owner, ownership will pass to a named third party.

Restriction

Private agreements placed in the public record that affect the use of land.

Reversionary Interest

The future interest in an estate that takes effect after the termination of another estate, such as a life estate; on the death of the life estate owner, ownership reverts to the grantor or the heirs or devisees.

Right-of-way

The right or privilege, acquired through accepted usage or contract, to pass over a designated portion of the property of another.

Riparian Rights

An owner’s rights in land that borders on or includes a stream or river. These rights include access to and use of the water for domestic purposes

Security agreement

Creates a security interest in personal property; must contain a complete description of the items against which the lien applies.

Special assessment

A tax or levy customarily imposed against only those specific parcels or real estate that will benefit from a proposed public improvement like a street or paved alley.

Specific Lien

A lien affecting or attaching only to a certain, specific parcel of land or piece or property

Statutory lien

A lien imposed on property by statute— a tax lien, for example— in contrast to an equitable lien, which arises out of common law.

Statutory right of redemption

The right of a defaulted property owner to recover the property after its sale b y paying the appropriate fee and charges; available in Texas for tax and foreclosures and homeowners associations assessment liens; not available for a deed-of-trust foreclosure.

Subcontractor

See general contractor.

Subordination agreement

A written agreement between holders of liens on a property that changes the priority of mortgage, judgement, and other liens under certain circumstances.

Surety bail bond lien

A pledge if real estate instead of cash as a security for bail.

Tax lien

A charge against property created by operation of law. Tax liens and assessments take priority over all other liens.

Tax sale

A court-ordered sale of real property to raise money to cover deliquent taxes.

Taxation

The process by which a government or municipal quasi-public body raises body monies to fund its operation.

Uniform Commercial Code

A codification of commercial law that attempts to make uniform throughout the United States all laws relating to commercial transactions. Security interests in personal property are created by an instrument known as security agreement. To give notice of security interest, a financing statement must be recorded.

Vendee’s Lien

A buyer’s claim against a seller’s property when the seller has not delivered title buyer, as in an installment contract or contract deed.

Vendor’s lien

The equitable lien of the grantor upon the land conveyed, on the amount of unpaid purchase

Voluntary lien

A lien that arises because of actions permitted by a person, such as when signing a deed of trust or mortgage.

Wage Lien

A lien ordered by the Texas Workforce Commission against all real and personal property of an employer who owes back wages to an employee