Chapter 2 - Rights in Real Estate Flashcards
Simple definition of Real Estate
the air, water, land, and everything affixed to the land
The legal concept of land encompasses
The surface area of the earth, everything beneath the surface of the earth, all natural things permanently attached to the earth, the air above the surface of the earth
Parcel or Tract
a portion of land delineated by boundaries
Unique physical characteristics of land
immobility, indestructibility, and heterogeneity
Land is ______, since no two parcels of land are exactly the same
non-homogeneous
The legal concept of real estate encompasses:
Land, all man-made structures that are ‘permanently’ attached to the land
In addition to land, real estate includes
man-made structures (aka improvements) such as fences, streets, buildings, wells, sewers, sidewalks, and piers
Bundle of rights
set of rights that apply to property
Classifications of property
real property and personal property
real property
is ownership of real estate and the bundle of rights associated with owning the real estate
Personal property
is ownership of anything which is not real estate and the rights associated with owning the personal property item. aka chattels or personalty
Since all real estate in the US is owned by some person, private organization or government entity…
all real estate in the country is real property
Tangible property
is physically visible and material property
All real estate, by its physical nature, is tangible property
Intangible
property is abstract, having now physical existence in itself.
Real Property rights
consist of the bundle of rights associated with owning a parcel of real estate.
Right to use, right to transfer, right to encumber, right to exclude, right to possession
Right to Use
refers to the right to use the property in certain ways, such as mining, cultivating, landscaping, razing, and building on the property.
Right to Transfer
Includes the right to sell, bequeath, lease, donate, or assign ownership interests
Right to Emcumber
the right to mortgage the property as collateral for debt
Right to Exclude
gives the property owner the legal right to keep others off the property and to prosecute trespassers
The bundle of real property rights also applies separately to the individual components of real estate…
the air, surface and subsurface
A ____ ____ is a common example of the transfer of a portion of one’s bundle of rights
ordinary lease
Surface Rights
Apply to the real estate contained within the surface boundaries of the parcel - ground, all natural things affixed to the ground, and improvements.
Water is included in surface rights
Air Rights
apply to the space above the surface boundaries of the parcel, as delineated by imaginary vertical lines extended to infinity.
Subsurface Rights
Apply to the land beneath the surface of the real estate parcel extending from its surface boundaries downward to the center of the earth.
Water Rights
the rights to own and use water found in lakes, streams, rivers and the ocean.
They determine where parcel boundaries can be fixed with respect to adjoining bodies of water
What variables define an owners water rights
whether the state controls the water, whether the water is moving, whether is navigable
Doctrine of Prior Appropriation
state-owned body of water requires a permit for the use of the water
If a state does not operate under prior appropriation, it operates under the common law doctrines of…
littoral rights and riparian rights
Littoral Rights
concern properties abutting bodies of water that are not moving - lakes & seas.
Legal premise underlying the definiton of littoral rights
is that the lake or sea is a navigable body of water, therefore, publically owned
If a body of water is entirely contained within the boundaries of an owner’s property…
it is non-navigable, and therefore the owner has unrestricted rights of usage
Riparian Rights
concern properties abutting moving water such as streams and rivers
If a property abuts a stream or river, the owner’s riparian rights are determined by..
Whether or not the water is navigable or not navigable
If the property abuts a non-navigable stream…
the owner enjoys unrestricted use of he water and owns the land beneath the stream to the stream’s midpoint
If the property abuts a navigable stream…
the waterway is considered to be a public easement, and the owner’s property extends to the water’s edge. The state owns the land beneath the water.
One’s riparian rights to use flowing water are subject to the conditions that:
The usage is reasonable and does not infringe on the riparian rights of others, does not pollute the water, and does not impede or alter the course of the water flow.
The primary criterion for distinguishing real from personal property is whether the item is …
permanently attached to the land or to structures attached to the land.
Fixtures
A personal property item that has been converted to real property by attachment to real estate. Must be itemized and excluded in the sale contract if not included in sale.
Chandeliers, toilets, water pumps
Real vs. personal property differentiation criteria
Intention - was it meant to be removed
Adaptation - uniquely adapted to property
Functionality - item is vital to the operation of the building
Relationship of parties - install fixture for a specific business
Sale or lease contract provisions - listing of an item in contract as personal property
Trade Fixtures
or chattel fixtures, are items of a tenant’s personal property that the tenant has temporarily affixed to a landlord’s real property in order to conduct business. (racks for clothes, displays, freezers)
Emblements
plants and crops requiring human intervention and labor. considered personal property
Plants and crops that grow naturally without requiring anyone’s labor or machinery are
considered real property
Factory-built Housing
consists of dwelling unites constructed off-site and transported to and assembled on a building site
Manufactured housing
is factory-built housing that conforms to HUD standards
Severance
The conversion of real property to personal property by detaching it from the real estate. (cutting down a tree)
Affixing
Is the act of converting personal property into real property by attaching it to the real estate. (assembling a pile of brinks into a bbq pit)
Real Property
land, fixtures, attachments, conversions by affixing
Personal Property
trade fixtures, emblements, conversion by severance
Government entities regulate the following aspects of real property interests:
the bundle of rights, legal descriptions, financing, insurance, inheritance, and taxation
Regulation of real property interests takes form of
federal and state laws and regulations, county and local ordinances and codes, and court decisions in the judicial system
Federal regulation
primarily concerned with broad standards of real property usage, natural disaster, land description and discrimination
State Regulation
are the primary regulatory entities of the real estate business. They establish license laws and qualifications.
exert regional influence in the usage and environmental control of real estate within the state
play a role in defining how real property may be owned, transferred, encumbered, and inherited
Local Regulation
County and local government regulation focuses on land use control, control of improvements, and taxation.
They have the power to zone land, take over land for public good, issue building permits, and establish the rules for development projects
Judicial Regulation
exters an influence on real estate ownership and use though decisions based on case law and common law, as distinguished from statutory law
Case Law
consists of decisions based on judicial precedent
Common Law
is the collective body of law deriving from custom and generally accepted practice in society
