Real Property Ownership and Interests

Flashcards covering key vocabulary related to property ownership and interests, focusing on legal rights, types of ownership, and related concepts.

Bundle of Legal Rights

The rights of disposition, enjoyment, exclusion, possession, and control associated with property ownership.

Disposition

The right to determine how to dispose of property, including selling, willing, trading, or gifting it.

Enjoyment

The right of uninterrupted use of property without harassment or interference from a third party with a superior title.

Exclusion

The right to keep others from entering or using the property.

Possession

The right to use or occupy the property.

Control

The right to control the use of the property and its profits within the framework of the law.

Appurtenances

Rights or privileges that run with the land and are passed with property ownership unless legally severed.

Improved Land

Land that usually refers to land that has a structure on it (a house).

Improved Lot

Lot that means basic services are available (electricity, phone, street access, etc.).

Surface Rights

Rights to the surface of a parcel of land.

Subsurface Rights

Rights to the natural resources below the surface of a parcel of land; can be sold or leased separately from the surface rights.

Air Rights

Rights to the air space above a parcel of land; may be sold or leased independently of the land.

Riparian Rights

Rights addressing the right to use adjacent water.

Littoral Rights

Rights that generally pertain to navigable waters with a tide.

Accretion

Gradual increase in land resulting from the deposit of soil by water.

Avulsion

A rapid decrease in land caused by an act of nature such as a flood—property boundaries do not change.

Erosion

Slow wearing away of soil by action of wind or water.

Reliction

New land acquired by water receding or disappearing.

Lateral Support

Right to have adjacent property support the natural boundaries of the land.

Subjacent Support

Right to have subjacent support for the surface of the property from the owner of the subsurface rights.

Fructus Naturales

Fruits of Nature which do not require annual cultivation and are considered real property.

Fructus Industriales

Fruits of industry, annual crops, or emblements considered personal property if planted by a tenant farmer.

Severance

Changing an item of real estate to personal property by detaching it from the land.

Fixtures

An item that was once personal property but has been converted to real property by being permanently affixed to the realty.

Chattels

Also known as personal property, that which is movable and meant to be moved.

Annexation

The process where an item of personal property becomes real estate through attachment.

Total Circumstances Test (IRMA)

Legal tests of a fixture: (1) Intention of the annexor (most important factor) (2) Relationship of the annexor as well as the existence of an agreement (3) Method of annexation (4) Adaptation to real estate

Trade Fixtures

Personal property owned by a tenant, attached to rented real property for the tenant’s use during the lease; if not removed by the end of the lease, they accession to the landlord.

Agricultural Fixtures

Special class of fixtures in North Carolina; items attached by the tenant farmer, considered real property of the landlord.

Improvements

A valuable addition to the land or a change in its condition intended to enhance the value.

Uniform Commercial Code (UCC)

North Carolina code where financed items remain personal property until paid in full. A creditor may remove item upon default and a security agreement may be filed by creditor.

Manufactured Housing

Factory-built by HUD standards with a permanent chassis; considered personal property that may convert to real property.

Modular Housing

Factory-built housing by state building codes; considered real property as soon as assembled on-site

Freehold Estates

Ownership estates for a potentially unlimited period of time providing title.

Fee Simple Absolute

No limitations on fee simple ownership; the highest type of interest in real estate recognized by law.

Fee Simple Defeasible

Also called qualified (limited); may be lost by the occurrence or nonoccurrence of a specified event.

Fee Simple Subject to a Condition Subsequent

Exists provided condition is not violated; former owner retains a future right of reentry through court proceedings.

Fee Simple Determinable

Exists “so long as” limitation is met; former owner retains the possibility of an automatic reverter in the future.

Life Estate

Limited to the duration of a lifetime; either that of the owner or of another designated person.

Conventional Life Estate

Created by the owner by deed or will for the lifetime of the new owner (life tenant).

Life Estate Pur Autre Vie

Created by the owner by deed or will for the lifetime of a third party called the measuring life. The measuring life has no ownership interest.

Remainder Interest

The grantor names a party to receive title at the end of the life estate.

Reversionary Interest

The grantor does NOT name another party to receive title when the life estate terminates, therefore title reverts back to the grantor or the grantors’ heirs or devisees.

Legal Life Estate

One created by statute rather than common law.

Homestead

A legal life estate involving the family home in some states that protects at least some part of the home from most creditors.

Ownership in Severalty

Title vested in one natural or legal person or entity; sole ownership.

Concurrent Ownership

Co-ownership; Co-tenants—held by two or more persons or entities at the same time.

Tenancy in Common

Each owner with an undivided interest; unity of possession where the interest does not have to be equal.

Joint Tenancy

Two or more owners with equal interest delivered simultaneously by the same instrument (deed). In North Carolina, interest can be unequal. Joint tenants usually have right of survivorship between tenants; last surviving joint tenant will own the property in severalty.

Tenancy by the Entirety

Special form of ownership for married couples only; must be married at the time that title is received. Property owned prior to marriage does not automatically convert to tenancy by the entirety upon marriage.

Common Interest Community Ownership

Includes condominium ownership, cooperative ownership, townhouse ownership, time-share ownership, and planned unit development.

Condominium Ownership

Created under horizontal property acts; owner of each unit has title to airspace and undivided interest in the common elements of the building or area.

North Carolina Condominium Act of 1986

A condominium is created and established when the developer of the property executes and records a declaration of its creation in the county where the property is located.

Cooperative Ownership

Title to the building is held by a corporation or land trust. The purchaser is a shareholder who receives a stock certificate in the corporation and a proprietary lease to an individual unit for the life of the corporation.

Townhouse Ownership

Each townhouse unit is individually owned. Each unit owner belongs to the homeowners’ association that owns the common areas where the owner of each town house unit also independently owns the land on which the unit is built.

Time-Share Ownership

Can be either a fee simple interest (time-share estate) or a right to use (time-share use). It is any right to occupy a unit for at least five separate time periods over at least five years.

The North Carolina Time Share Act

Regulates the development and sale of time-shares. Time-share salespeople must be active real estate brokers under the supervision of the project broker.

Trust

A means by which one party transfers ownership of property to another party, or parties, to hold or manage for the benefit of a third party; used in recent decades as a major estate planning tool to limit the time and cost of probate.

Trustor

The individual who creates the trust; also called grantor or settler.

Beneficiary

The person or entity that benefits from the trust.

Trustee

The fiduciary who exercises control over the subject property to the instructions of the trustor in the trust agreement; can be the trustor.

Land Trust

A trust where real estate is the only asset where the Beneficiary is usually the trustor