Ch. 1 Real Property Characteristics & Rights

Question 1

What is the definition of ‘real estate’?

Answer 1

Air, water, land, and everything affixed to the land.

Question 2

Besides land, real estate encompasses man-made structures that are permanently attached to the land. What are these structures called?

Answer 2

Improvements

Question 3

What is the definition of ‘land’?

Answer 3

Land encompasses the surface of the earth, everything beneath the surface, everything permanently attached to the earth, and the air above the earth.

Question 4

What are the physical characteristics of ‘land’? Give a brief description of each.

Answer 4

Immobility - land is immobile and cannot be moved from one site to another.

Indestructibility - land is indestructible in the sense that one would have to remove a segment of the planet all the way to the core in order to destroy it.

Heterogenity - no two parcels of land are the same.

Question 5

Name the 5 economic factors of ‘land’.

Answer 5

1. Demand
2. Utility
3. Scarcity
4. Transferability
5. Situs

Question 6

What is the definition of “property”?

Answer 6

Property refers to an item that is owned as well as the set of right to the item enjoyed by the owner.

Question 7

What are the “bundle of rights” of property?

Answer 7

1. Possession
2. Use
3. Transfer
4. Encumber
5. Exclude

Question 8

What is ‘real property’?

Answer 8

Ownership of real estate and the bundle of rights associated with owning real estate.

Question 9

A) What is “personal property”?

B) What type of personal property are chattel fixtures?

Answer 9

A) Ownership of anything that is not real estate, and the rights associated with owning personal property.

B) Also known as ‘trade fixtures’. Item’s of tenants personal property that the tenant has temporarily affixed to the land lord’s real estate in order to conduct business.

Question 10

Describe ‘tangible’ property.

Answer 10

Physical, visible, and material.

Question 11

Describe ‘intangible’ property.

Answer 11

Abstract, having no physical existence in itself.

Question 12

What are the 5 types and uses of property that exist in the real estate market?

Answer 12

1. Residential
2. Commercial
3. industrial
4. Agricultural
5. Special purpose

Question 13

What are the 5 criteria for distinguishing real from personal property? Explain each.

Answer 13

1. Fixture - a personal property item that has been converted to real property by attachment to real estate.
2. Differentiation criteria - intention, adaptation, functionality, relationship of parties, contract provisions.
3. Trade (or chattel) fixtures - personal property temporarily attached to real estate to conduct business; to be removed at some point.
4. Emblements - plants or crops considered personal property since intervention/labor is necessary.
5. Conversion - transforming real to personal property through severance, or personal to real property through affixing.

Question 14

What is the primary purpose of federal real estate regulations?

Answer 14

Primarily concerned with broad standards of real property usage, natural disaster, land description, and discrimination.

Question 15

What is the primary purpose of state real estate regulations?

Answer 15

Establish real estate license laws and qualifications. In addition, state governments have established real commissions to administer laws and oversee activities of licensees.

Question 16

What is the primary purpose of local real estate regulations?

Answer 16

Levies real estate taxes and controls specific usage, while judicial regulation applies case law and common law to disputes.