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NC Real Estate > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

Bundle of Rights

A

A lot of rights and interests get transferred with a piece of real estate (disposition, enjoyment, exclusion, possession, control) DEEPC

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2
Q

Tenements

A

all of the rights and interests that go with the land

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3
Q

Hereditaments

A

land and all of the tenements that can be inherited

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4
Q

Profit a prendre/profit

A

intangible rights in the land of another; right to take minerals, soils, timber, fish, or game from that land

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5
Q

fruits of the soil (fructus naturales)

A

perennials, plants that transfer with the land

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6
Q

fruits of industry (fructus industriales)

A

annuals, plants that do NOT transfer with the land, must be planted yearly. Considered personal property. Transferred with a bill of sale.

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7
Q

Appurtenance

A

any right, privilege, or interest of the owner that runs with the land

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8
Q

Subsurface right (mineral right)

A

interest that allows the owner to take minerals from the earth

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9
Q

Mineral lease

A

permits use of the land for mineral exploration and mining operations

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10
Q

Air rights

A

rights to the area above the surface of the earth

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11
Q

Lateral support

A

right of land to be supported in its natural state by adjacent land

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12
Q

Subjacent support

A

right to have one’s land supported from below

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13
Q

Fixture

A

an item of personal property that is attached to the land or a permanent improvement on the land in such a manner that the law deems it to be part of the real property to which it is attached

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14
Q

Total Circumstance Test

A

a test that is used to determine if an item is personal property or a fixture; composed of four criteria: Intention, Relation of the Attacher, Method, and Adaptation

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15
Q

Intent

A

One of the four criteria on the Total Circumstance Test and the major determinant in deciding if an item is a fixture

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16
Q

Estate

A

A possessory interest in real property; may be either a freehold estate or a leasehold
estate; an extent or degree of a person’s interest in real property

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17
Q

Freehold Estates

A

A possessory interest in real property of uncertain (and often unlimited)
duration; an ownership estate in real property; either a fee simple or life estate. The holder of a
freehold estate has title. (ownership)

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18
Q

Allodial System

A

The system of land ownership that allows anyone to own land. There are 4 government rights: Police power, Eminent Domain, Taxation, Escheat (PETE)

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19
Q

PETE

A

Police power, eminent domain, taxation, escheat

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20
Q

Police power

A

regulations for the health, safety, and welfare of the community

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21
Q

Eminent domain

A

taking of property for the public good: The government’s constitutional power to take private property for public
use, as long as the owner is paid just compensation. (Condemnation is the action; eminent
domain is the right.)

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22
Q

Taxation

A

The right of government to require contribution from citizens to pay for government
services.

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23
Q

Condemnation

A

the action of taking property for eminent domain

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24
Q

Escheat

A

The reversion of property to the state (or, in some states, the county) after a person
dies without leaving a valid will or having any heirs.

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25
Q

Tenant

A

someone who holds an estate

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26
Q

Leasehold estates

A

e The temporary interest that an owner gives to a tenant (lessee) that includes
the right of possession and quiet enjoyment, without title (Less than ownership)

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27
Q

Types of Freehold Estates

A

Fee simple, fee defeasible, life estate

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28
Q

Fee simple (fee, fee simple absolute)

A

includes everything in the bundle of rights, forever, unconditionally (most common form of ownership)

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29
Q

Fee simple Defeasible

A

Conditional ownership; ownership can be defeated under certain conditions

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30
Q

Condition Subsequent

A

A fee simple defeasible estate that requires a lawsuit to defeat ownership (“but if”)

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31
Q

Determinable

A

A fee simple defeasible estate that has automatic reversion if a condition is not met (“as long as”)

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32
Q

Life Estate

A

a non-inheritable freehold estate, created only for the life of the life tenant

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33
Q

Life tenant

A

one who holds a life estate

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34
Q

Conventional life estate

A

A grantor passes ownership to a life tenant and establishes the life tenant as the measuring life. When the life tenant dies, the estate reverts back to the grantor

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35
Q

Conventional life estate with Remainder interest

A

A grantor passes ownership to a life tenant who is also the measuring life. When the life tenant dies, the estate is passed on to a 3rd party (remainderman)

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36
Q

Life estate Pur Autre Vie

A

A grantor passes ownership to a life tenant and establishes a 3rd party as the measuring life. When the 3rd party dies, the estate reverts back to the grantor

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37
Q

What rights does a life tenant have?

A

Act as owner, sell, transfer, encumber, borrow money, pay property taxes & assessments, make repairs

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38
Q

What CAN’T a life tenant do?

A

Commit waste; waste is the purposeful damage to the value of the revertor’s interest

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39
Q

Estover

A

life tenant can use resources on the property to make improvements

40
Q

Marital Life Estates

A

includes a dower or a curtest

41
Q

Dower

A

a wife’s right to a life estate in the marital home

42
Q

Curtesy

A

a husband’s right to a life estate in the marital home

43
Q

Reversionary Interest

A

anytime the interest/estate goes back to the grantor

44
Q

Remainder interest

A

anytime the interest/estate goes to a 3rd party/remainderman

45
Q

What are the four types of ownership of real property?

A

Severalty, Tenancy in common, Joint tenancy, tenancy by the entirety

46
Q

Severalty Ownership

A

ownership by one person

47
Q

What are the 3 types of ownerships between 2 or more people?

A

Tenancy in common, joint tenancy, and tenancy by the entirety

48
Q

Tenancy in Common (TIC)

A

A form of co-ownership in which two or more persons each have an
undivided interest in the entire property (unity of possession), but no right of survivorship. The most common in NC

49
Q

Joint Tenancy

A

A form of co-ownership in which the co-owners have equal undivided interests
and the right of survivorship. Requires the unities of possession, interest, title, and time. (PITT)

50
Q

Tenancy by the Entirety

A

A form of property co-ownership by a married couple or partners in a
legal civil union in which each spouse or partner has an equal and undivided share of the entire
property. Not recognized in every state.

51
Q

Suit for partition

A

court action to end co-ownership; parting ways

52
Q

Right of Survivorship

A

surviving co-tenants automatically acquire a deceased co-tenant’s
interest in the property.

53
Q

What is the difference of a Joint Tenancy in NC vs other states?

A

In NC, it does not favor the right of survivorship, thus it must be written in. It operates as a TIC.

54
Q

What ways can you terminate a Tenancy by the Entirety?

A

Death, divorce, or agreement by the parties

55
Q

What are the four types of common interest community ownerships?

A

Condos, townhouses, cooperatives, and timeshares

56
Q

Condominium

A

A property developed for co-ownership, with each co-owner having a separate
interest in an individual unit, combined with an undivided interest in the common areas of the
property and air space consisting of the area between the walls, floor, and ceiling.

57
Q

Townhome/Townhouse

A

Property developed for co-ownership where each co-owner has a separate fee
simple interest in an individual unit, including its roof and basement, as well as the land directly
beneath the unit, and an undivided interest in the common areas of the property.

58
Q

Cooperative

A

A type of property ownership under which residents have the right to occupy a
unit by purchasing stock shares in the corporation that owns the property. These individuals
own stock shares, not real estate.

59
Q

Timeshare

A

A form of property ownership in which several buyers purchase an interest in the
same estate, with each party having the right to use the property and facilities for a designated
period.

60
Q

Trust

A

arrangement where a person’s assets are being held by a 3rd party (usually a bank, attorney, or other person) for the benefit of that person

61
Q

Fiduciary arrangement (trust)

A

the 3rd party trustee holds assets on behalf of a beneficiary, the trust has set parameters of the trustee’s authority, and it may allow assets to pass outside of probate

62
Q

Living trusts

A

place assets into a trust for a person’s benefit during their lifetime and then transfer assets to a designated beneficiary at death

63
Q

Testamentary trusts

A

leaving of assets to children or others in cases in which the distribution may be set to occur at a particular time/event (birthday, graduation, marriage)

64
Q

Land trust

A

trustee agrees to hold ownership of the real property for the benefit of the trustor

65
Q

Encumbrance

A

a right or interest in property by someone other than the owner

66
Q

Liens

A

A non-possessory interest in property, giving a lienholder the right to foreclose if the
owner does not pay a debt owed the lienholder.

67
Q

What are the five specific types of liens?

A

Mortgage, Trust Deeds, Real Estate Taxes, Assessments, and Mechanical Liens

68
Q

What are the two types of general liens?

A

Judgments and Income taxes

69
Q

Mortgage lien

A

loans you requested be placed on your home; voluntary; specific (limited to the property)

70
Q

Real Estate Tax

A

always the #1 lien, levied according to value (ad valorem), based on the assessed value

71
Q

Mechanic Lien

A

by contractors, subcontractors, and suppliers who have done work on your home

72
Q

Restrictive covenants (CCRs)

A

A restriction on real property use imposed by a former owner; promise
to do or not do an act relating to real property; usually an owner’s promise to not use property in
a particular way. May or may not run with the land.

73
Q

Restrictions may be written in the individual deed or recorded as a master instrument

A

Declaration of Restrictions

74
Q

Lis Pendens

A

lawsuit pending

75
Q

Easements

A

nonpossessory rights or interests in land owned by another. It provides a right of use of land, not a right of possession

76
Q

Types of Encumbrances

A

Liens, CCRs, Deed restrictions, lis pendens, easements, encroachments

77
Q

What are the different types of easements?

A

appurtenant, easement in gross, easement by necessity, prescriptive easement

78
Q

Appurtenant Easement

A

attaches to the land and goes with it, benefits adjacent property, must be in writing, and are permanent

79
Q

Easement in Gross

A

benefits a 3rd party, usually for utilities (personal or corporation/commercial)

80
Q

Easement by Necessity

A

rules favors use of real estate, must exhaust all other means of use, use as a last resort

81
Q

Easement by Prescription

A

statutory use period in NC is 20 years; must meet “adverse possession” elements (open, continuous, exclusive, adverse, notorios (OCEAN)), for a prescribed period of time

82
Q

Party wall

A

used by two adjoining neighbors to support the sidewall of each unit

83
Q

Encroachment

A

a trespass on the land of another as a result of an intrusion or invasion by some structure or other object (wasll, fence, overhanging balcony, or driveway)

84
Q

Emblements

A

An annual crop that is planted and cultivated by a tenant farmer and is always the
personal property of the tenant farmer (fructus industriales)

85
Q

Ad Valorem

A

according to value

86
Q

Machinery Act

A

sets the details of property taxation in NC

87
Q

Assessed value

A

the value placed on a property for taxation purposes

88
Q

Market Value

A

The most probable price a property should bring on an open and competitive
market under all conditions essential to a fair sale

89
Q

Octennial Reappraisal

A

Reappraisal of property every 8 years

90
Q

Tax assessor

A

responsible for the valuation of property for tax purposes

91
Q

NC Tax Rate Formula

A

(Assessed Value divided by 100) times Tax Rate

92
Q

Mill Rate

A

a tax rate based on one-tenth of one cent

93
Q

Mill

A

one-tenth of one cent (.001)

94
Q

Mill Rate Formula

A

Assessed Value divided by 1000 times Mill Rate

95
Q

Appraisal

A

the process of determining a market value

96
Q

Assessment

A

the determination of a value of the property for taxation purposes

97
Q

Front Foot

A

the number of feet a property has the borders on an improvement by the local government

NC Real Estate (4 decks)

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