Unit 1-3

Real Estate

Real Estate Brokerage

A business that helps clients buy, sell, or rent properties, acting as an intermediary between buyers and sellers.

Appraisal

The process of estimating a property’s value using professional judgment and established methods.

Property Management

The job of overseeing and maintaining property on behalf of its owner, with the goal of maximizing financial return.

Financing

Providing funds (usually through loans) for real estate transactions, often through banks or mortgage companies.

Subdivision and Development

Splitting large properties into smaller ones (subdivision) and building on them (development).

Home Inspection

A thorough inspection of a property to assess its condition, typically required when buying a home.

Real Estate Counseling

Offering professional advice on buying, selling, or investing in property.

Real Estate Market

The supply and demand for real estate, where prices rise or fall depending on availability and need.

Supply Factors in Real Estate

Elements that influence the availability of properties, like labor, construction costs, regulations, and interest rates.

Demand Factors in Real Estate

Elements that influence the need for properties, such as population size, jobs, and wages.

Land

Includes the earth’s surface, subsurface, and air space above. Also includes things naturally attached to the land like trees and crops.

Physical Characteristics of Land

Immobility: Land cannot be moved.

Indestructibility: Land is permanent and cannot be destroyed.

Nonhomogeneity (Uniqueness): No two parcels of land are exactly alike.

Subsurface Rights

Rights to natural resources (like minerals) under the land, which can be sold or leased separately from the surface.

Air Rights

Rights to the air space above the land, which can also be sold separately, though they have limitations due to air travel.

Water Rights

Rights to use water from rivers, lakes, or oceans, which vary by location and type of water body.

Riparian Rights

For landowners near a flowing body of water (like a river).

Littoral Rights

For landowners near non-flowing, navigable bodies of water (like lakes or oceans). Allows you to use the shoreline

Prior Appropriation Doctrine

In some states, water use is controlled by the state, requiring landowners to prove beneficial use for things like irrigation.

Real Estate

The land plus everything permanently attached to it (natural or man-made).

Real Property

The legal rights, benefits, and interests associated with the ownership of land and real estate.

Bundle of Legal Rights

Possession Control Enjoyment Exclusion Disposition

Title

The right to ownership of real property, proven by a deed.

Appurtenance

A right or privilege tied to the property, such as parking spaces, easements, or water rights. These rights typically transfer to the new owner when the property is sold.

Economic Characteristics of Land

Scarcity: Land is limited in supply.

Improvements: Changes made to the land (e.g., buildings or infrastructure).

Permanence of Investment: Land typically offers a stable, long-term investment.

Area Preference (Situs): The value of land is affected by its location

Chattel

Movable items like furniture or crops that aren’t fixed to the land.

Emblements

Annual crops like grains and vegetables.

Severance

When an item of real property is removed and becomes personal property (e.g., a tree cut down for firewood)

Annexation

When personal property becomes real property (e.g., construction materials becoming part of a building)

Factory-Built Homes

Can be personal property unless permanently affixed to land.

Fixture

Personal property that becomes real property once attached to land or a building. The legal tests for a fixture are known by the acronym MARIA

MARIA

Method of Attachment: How the item is attached (e.g., nails, cement).

Adaptability: How the item is suited to the use of the land/building.

Relationship of the Parties: Whether the item is considered part of the property based on the relationship (tenant vs. owner).

Intent: The intent of the person attaching the item (was it meant to stay?).

Agreement: Whether there’s an agreement specifying if the item is personal

Trade Fixtures

Fixtures used in business that remain personal property if the tenant removes them before the lease ends.

accession

If trade fixtures are left behind, they become part of the real property, and the landlord acquires them through

Freehold Estate

An estate that lasts for an indeterminate period of time, meaning it doesn't have a fixed end date.

Fee Simple

The highest form of property ownership. The owner has complete control over the land.

Fee Simple Defeasible

A type of fee simple estate that is conditioned by a specific event. If the event happens (or doesn't happen), the estate could be lost.

Life Estate

Ownership of property for the lifetime of the tenant or another person (called "pur autre vie"). After the person's life ends, the property reverts to another party.

Legal Life Estate

Created by state law to protect spousal or homestead rights in property (e.g., when a spouse cannot be disinherited).

Encumbrance

A claim or liability attached to the property that might affect the property’s value or use.

Lien

A legal claim against the property to secure a debt (e.g., mortgage or tax lien).

Covenants, Conditions, and Restrictions (CC&Rs)

Private restrictions that limit how property can be used (e.g., no fences over a certain height).

Easement

The right to use another person’s land for a specific purpose (e.g., for a driveway).

Easement Appurtenant

An easement that benefits a dominant tenement (property) and is tied to the land. It transfers with the land when sold.

Easement in Gross

An easement held by an individual or company rather than benefiting land (e.g., utility company right-of-way).

Easement by Necessity

Created when landlocked property has no access to a public road and needs an easement to get access.

Easement by Prescription

Acquired after a long period of continuous and open use of someone else’s property, as required by law.

Terminating an Easement

When it is no longer needed. When the dominant and servient tenements are owned by the same person. If the dominant tenement releases the right. Abandonment or nonuse of a prescriptive easement can also terminate it.

License

A personal privilege to enter another’s land for a specific purpose (e.g., a ticket to a concert). Unlike an easement, it can be revoked at any time.

Encroachment

When part of a structure (e.g., a fence or building) illegally intrudes onto another person's property.

Lis Pendens

A notice that there’s pending litigation which could affect the title to the property.

Police Power

The state’s authority to make laws for public health, safety, and welfare (e.g., zoning laws).

Eminent Domain

The government's right to take private property for public use, typically by paying the owner fair compensation. This is done through condemnation.

Taxation

The government’s power to levy taxes on property to fund public services.

Escheat

The process by which the state takes ownership of property when someone dies without a will or lawful heirs.

What is the difference between CC&Rs and HOA

HOA is the organization that created the CC&Rs,