Property Ownership

  • Bundle of Rights

    • Definition: Fundamental concept in real estate that encompasses the rights associated with property ownership.
    • Concept: Think of the bundle of rights as a collection of separate rights (like straws) that can be divided or transferred.
    • How it works: When a title is transferred, the buyer receives the entire bundle of rights unless stated otherwise.

  • Key Rights in the Bundle

  1. Right of Enjoyment:
    • Allows the owner to engage in lawful activities on the property.
    • Example: Watching TV, gardening, etc.
  2. Right of Disposition:
    • The right to transfer ownership (sell, lease, or will the property).
    • Important to note: This right can be limited by liens or if the property is encumbered by loans.
  3. Right of Possession:
    • Establishes that the title holder is the legal owner of the property.
  4. Right of Control:
    • The owner can use the property legally and in accordance with local regulations and any homeowner association rules.
  5. Right of Exclusion:
    • Owners can restrict others from entering their property unless overridden by easements or legal actions such as search warrants.

  • Impact of Laws on Rights:

    • The rights can be distributed or limited to multiple parties in real estate transactions (especially in commercial properties).
    • Local laws such as zoning and tenant laws can greatly impact how these rights are exercised.

  • Water Rights:

    • Riparian Rights: Related to properties adjacent to flowing water bodies (e.g. rivers). "Riparian river, Riparian river" helps memorize.
    • Littoral Rights: Concerned with properties near stagnant water bodies (e.g. lakes, seas).
    • Correlative Use Rights: Allow property owners to extract and use underground water.
    • Prior Appropriation Doctrine: In scarce water areas, the state controls water use rather than the property owner.
    • Accretion: Gradual increase of land by natural water action.
    • Erosion: Gradual loss of land due to natural forces.
    • Avulsion: Sudden loss of property due to natural disaster (e.g. floods) - considered "bad news".

  • Freehold Estates:

    • Definition: Ownership for an undefined duration.
    • Types:
    1. Fee Simple Absolute:
      • Maximum ownership rights, not free from encumbrances.
    2. Fee Simple Defeasible:
      • Ownership with conditions that can cause loss of estate upon occurrence of specified events.
    3. Life Estate:
      • Ownership for the duration of a person's life; property reverts upon death.
      • Example: Property can be held for a life tenant and will return to grantor or designated remainderman after tenant's death.

  • Less than Freehold Estates:

    • Definition: Temporary rights to property through rent or lease.
    • Types:
    1. Estate for Years: Fixed lease period (e.g., summer rental).
    2. Periodic Tenancy: Tenancy with no fixed end but renews at intervals (e.g., month-to-month).
    3. Estate at Will: Tenancy without fixed period; can be terminated at any time.
    4. Estate at Sufferance: Tenant stays after lease ends, often requiring eviction.

  • Concurrent Ownership:

    • Ownership in Severalty: Property owned by one person.
    • Tenancy in Common: Allows for different ownership interests and shares; no right of survivorship.
    • Joint Tenancy: Must comply with four unities (time, title, interest, possession) and includes right of survivorship.

  • Bylaws vs. CC&Rs (Covenants, Conditions, and Restrictions):

    • CC&Rs: Rules set by homeowner associations governing property use. Vital to review for limitations on property rights (e.g., types of pets, external structures).
    • Bylaws: Govern the operation of the homeowners association itself, covering elections and governance.
    • Important to understand and comply to avoid penalties or forced compliance.