3 - Interests in Real Estate

Question 1

Allodial System

Answer 1

In 13th century England, the king decided the individuals could privately own land. All land in the United States is held under the system.

Question 2

Taxation

Answer 2

The right the government retains to tax real property.

Question 3

Leasehold Estates

Answer 3

An estate that gives possession and use of a property without ownership. The person giving the use (the owner, landlord) is the lessor, And the Tenant is the lessee.

Question 4

Encumbrance

Answer 4

A claim, lien, charge, or liability attached to and binding real property

Question 5

Encroachment

Answer 5

The unauthorized intrusion of another’s property on to an adjoining property. If it’s allowed to remain it can eventually acquire the rights to be there.

Question 6

Setback

Answer 6

The amount of space required between the lot line and the building line. It can be determined by zoning or deed restrictions.

Question 7

Escheat

Answer 7

If a person dies intestate (without a will) and without heirs, the government will take title to his real property under the right of ______.

Also if land has been abandoned.

Question 8

Statutory Estates

Answer 8

Estates that are created by Statute or law.

Example: community property and homestead.

Question 9

Covenants, Conditions & restrictions. (CC&Rs)

Answer 9

Found in a recorded document called a declaration of restrictions and are imposed by the grantor, who is usually the developer of the subdivision. Violation can result in a civil court action brought by other property owners who are bound by the same deed restrictions. The court will issue an injunction to enforce the restrictions.

Question 10

Water Rights

Answer 10

Riparian Rights- Give owner the right to use water from a river or a stream on or next to the property.

Littoral rights - given owner the right to use water from a lake, Ocean, or sea on or next to the property.

Question 11

Assessed Value

Answer 11

The property value for tax purposes. The tax rate multiplied by the assessed value which equals the tax amount due.

Question 12

Mills

Answer 12

The amount of tax payable per dollar of the assessed value of a property. Rates can be per hundred or per thousand.

Question 13

Equitable Estates

Answer 13

These rights or privileges create an interest that is less than ownership or possession but nonetheless exist.

Example: liens or easement

Question 14

Appurtenance

Answer 14

A right or privilege or Improvement that belongs to and passes with land, but is not necessarily a part of the land.

Examples:

• easements
• leases that are binding on a new owner when the property is sold.
• Fixtures
• buildings and other improvements

Question 15

Life Estate

Answer 15

Ownership for the duration of someone’s life. The owner is called the life tenant. He or she has all the rights and privileges, duties, and responsibilities of a fee simple owner, except that the ownership terminates upon the death of the life tenant.

Question 16

Estate for years

Answer 16

Any lease with a specific starting and ending date. A preset time period.

No notice is required for this estate to end.

This lease survives death or the sale of the property.

Question 17

Periodic Estate

Answer 17

At least that automatically renews itself for like periods.

Example: Month to month or a week-to-week lease.

Requires notice to terminate, typically 30 days.

Question 18

Estate at will

Answer 18

Either the landlord or tenant may agree to terminate the lease “at will”.

Little or no notice may be required depending on the lease agreement.

The only lease that usually terminates on the landlords death or sale of the property.

Question 19

Tenancy at sufferance

Answer 19

Created when a lease expires, and the Tenant remains on the premises.

The holdover tenant no longer has any right to remain on the property because he or she is not paying rent, in the landlord does not accept his or her presence.

Question 20

Holdover Tenancy

Answer 20

If a landlord accepts rent from a holdover tenant, a _____ is created, which is sometimes called a periodic estate.

Question 21

Gross Lease

Answer 21

A lease in which the landlord pays all the expenses of the property. The tenant simply pays a flat rent.

Question 22

Net Lease

Answer 22

Type of lease where tenants pay rent plus a portion of the expenses of the property, such as taxes, maintenance, or utilities.

Question 23

Percentage Lease

Answer 23

Type of lease where tenant’s rent is based, in whole or part, the business receipts. The tenant may

• pay a base rent plus a percent of receipts
• a percent of receipts
• a base rent plus a percent of receipts above a specific minimum.

Question 24

Homestead Laws

Answer 24

Laws that exist in many states (42) and generally have two main purposes.

1. To prevent the forced sale of the home by creditors with 5 exceptions.
   - non-payment of property taxes.
   - Non-payment of a mortgage lien
   - non-payment of mechanics and material man’s lean
   - non-payment of property owner association fees or deuce
   - non-payment of a home equity loan
2. To provide a surviving spouse with shelter.

In Texas, Homestead protection is automatic when a home is purchased, cannot be waived by contract or other written agreement.

Limitations:
- A rural homestead is limited to 200 acres for a family unit and 100 acres for an individual.

• an urban homestead is limited to 10 acres of land and the improvements on it.
• one property per person or family.

Question 25

Texas Homestead Exemption

Answer 25

A tax benefit that shouldn’t be confused with the homestead protection.

Homeowners must apply, own, and occupy the home on January 1st to qualify.

If homeowner has failed to claim the exemption, he or she can backfile for two years.

Question 26

Dower (wife) and Curtesy (husband) Rights

Answer 26

Old statutory rights from English law that are being phased out or abolished in most states.

Basically states that the husband or wife gets fill rein of the property upon either of their deaths.

Question 27

Lien

Answer 27

A claim against a property to secure payment for a debt.

Can be created by agreement of the parties (voluntary), or through the operation of law (involuntary or statutory).

Question 28

Easement

Answer 28

A type of equitable estate that gives one the right to use or pass over another’s property for a specific purpose.

Question 29

Easement in gross

Answer 29

A type of Equitable estate that belongs to a person or Corporation and does not belong to the land.

example: a utility easement.

Question 30

Easement Appurtenant

Answer 30

A type of Equitable estate that is a right for the benefit of a piece of land. It runs with the land and passes to new owners when the land is sold. The most common use of this easement is for Ingress and egress, or to enter and exit one’s property.