Bundle of Rights Flashcards
Legal Rights
The bundle of rights concept is the idea that various rights of ownership are transferred along with real estate when it is transferred from one owner to another. The bundle of rights includes all legal rights that attach to the ownership of real property, including the right to:
Sell or lease; Encumber;
Use and enjoy; Exclude;
Devise by will; Cultivation and exploration;
License; Dedicate;
Give away or share; Mortgage;
Trade or exchange
Beneficial Interests
Each of these rights, powers, and privileges affects the value and marketability of a parcel of real estate. A parcel with less than the full bundle of rights may therefore have a reduced value.
When purchasing real estate, the buyer actually buys the rights previously held by the seller, except those that are reserved or limited in the sale. These rights are called beneficial interests associated with real property interests.
Division of Rights
Real estate licensees sell more than land and buildings. They also can sell any rights to, interests in, and title to real property that affect the value of the real property.
Every bundle of sticks (piece of real property) can be divided in many ways. The division is not that of acres or lots. Instead, it refers to the various rights that can be held in real property. Remember that such rights as water rights and mineral rights are part of the property and are separable.
