Chapter 5 - Property and Estates in Land Flashcards
Real Property
LAND, anything ATTACHED to the land, and anything appurtenant to the land. It is IMMOVABLE and usually transferred with a DEED.
Buildings, trees, permanent fixtures, anything permanently affixed to the land
Personal Property
Anything not real property. It IS MOVABLE and usually transferred with BILL OF SALE.
Anything not permanently attached to land.
Bundle of Rights
Rights in real property that include the right to:
Use - to occupy and use
Possess - to transfer by contract for a specific period of time (lease)
Encumber - place a loan against the property
Transfer - to sell in whole or in part
Exclude a thing - the right to not take any of the above action
What is the highest form of land ownership?
Freehold estate in land
Considered: Real property
Transferred by: Grant deed
Example – landlord who owns the real property
Two types of Fee Simple Estate
Fee Simple Absolute –
Fee Simple Defeasible –
Fee Simple Estates vs Life Estates
FEE SIMPLE Estates –
Highest form of ownership
Of INDEFINITE duration - not a set amount of time but continues indefinitely
Can be willed (estate of inheritance)
Are the greatest interest a person can own in land.
You own the building and the land
LIFE ESTATES –
Freehold Estates
Only for the duration of a person’s life.
Freehold Estate
Highest form of ownership in land and is comprised of FEE SIMPLE and LIFE ESTATES.
Leasehold Estate / Less-than-Freehold Estate
A tenant’s right to occupy real estate during the term of the lease.
Considered: Personal property
Transferred by: Lease or Rental Agreement
Example – a tenant is merely in possession of the property for a short period of time.
Land includes:
- Airspace
- Surface
- Underneath the Surface
What happens if the previous property owner reserved mineral rights for themselves?
If a property’s mineral rights have been reserved by the previous owner, the previous owner will own the mineral rights to that land instead of the current home owner.
The preliminary title report will indicate if any mineral rights have been reserved in the past.
Fixture
Personal property that is INCORPORATED INTO the land and BECOMES REAL PROPERTY.
Example –
Kitchen cabinets
Built-in microwaves
Tests for a Fixture
M - method of attachment A - adaptability or annexation R - relationship of the parties I - intent A - agreement
MARIA - Method of Attachment
The method a property is incorporated into the land. The degree of permanence is important to its classification as a fixture.
Example –
A built in hot tub attached to the yard with concrete = most likely a fixture = grant deed
vs
A hot tub that sits on top of the ground = most likely personal property = bill of sale
MARIA - Adaptability or Annexation
Personal property that is attached to the land and is being used as an ordinary use in connection with the land is usually considered a fixture.
Example – a house key – because it’s an object used in connection with the home and is considered real property.
MARIA - Relationship of the Parties
Buyer and seller must both agree what is considered a fixture or personal property. Example – a partially attached bookcase
Buyer’s agent should specify in the purchase agreement whether possible disputed items are REAL or PERSONAL property.
MARIA - Intent
The most important test for a fixture.
Example – If a seller’s INTENT is that an item is considered personal property and will go with the seller to their new home. AND IF The buyer’s intent indicates the item is considered REAL property and will stay with the property. Then both the buyer and seller’s intents are in conflict and the only answer is what is specified in the purchase agreement.
The real estate agent should specify in the listing agreement what will stay with the home (considered fixtures/real property) or what will go with the seller (not a fixture/personal property).
MARIA - Agreement
When there is a clear agreement between buyer and seller as to whether an item is considered a fixture/real property.
There should not be a dispute whether an item is real or personal property.
Fructus Naturales
NATURAL occurring vegetation and trees in nature.
Considered real property because they are ROOTED to the land.
When a tree is cut off, then it becomes personal property because it becomes movable.
Fructus Industriales
PLANTED trees and crops that are considered real property because they are attached by root to the land.
Emblements
Growing crops that grow from annual cultivation (e.g., wheat crop) rather than fruit trees or timber that have a permanent root systems.
Considered real property.
Doctrine of Constructive Severance
Allows a landowner to sell growing crops as PERSONAL PROPERTY while they remain attached to th eland.
Example – apples on an apple tree can be sold while they are still attached to the apple tree. When this happens, the growing crops (apples) are considered personal property, even though they are attached to the tree.
Appurtenant to the Land or “Incidental to the land”
Anything that is used with the land and for its benefit. “Runs with the land” and is considered real property.
Examples -- easements water company stock riparian water rights covenants conditions and restrictions (CC&Rs)
What is Easement and what are the 3 major types?
The ability to use someone else’s land.
Three major types –
- Appurtenant easement - Runs with the land = real property
- Prescriptive easement
- Easement in gross
Appurtenant Easement
Type of easement that allows a property owner (dominant tenement) to use the property of an adjoining property owner (servient tenement)
Dominant Tenement
Owner of an appurtenant easement who can use another person’s property.
Stock in a Mutual Water Company
Homeowners may organize a mutual water company to secure ample water supply at a reasonable cost. Benefits: Reduced costs and steady supply of water for stockholders’ properties.
A non-profit or corporation owned by stockholders (homeowners) and used to obtain water for their own use.
Each property owner owns stock in the mutual water company.
The stock is APPURTENANT to the land (runs with the land) and is considered REAL PROPERTY.
A lien may be placed if an owner does not pay for water used.
Riparian Water Rights
Property owner can reasonably use water from a RIVER, STREAM, CREEK (flowing waterway) or watercourse adjacent to a parcel of land.
RUNS WITH THE LAND and are considered REAL PROPERTY.
Littoral Water Rights
Property owner can reasonably use water from a POND, LAKE, or OCEAN (standing body of water) adjacent to a parcel of land.
RUNS WITH THE LAND and are considered REAL PROPERTY.
Doctrine of Appropriation
Allocates water to property owners who are NOT located adjacent to a river, stream, watercourse, pond, lake or ocean. Allows those not located adjacent to water to receive an allocation of water from the local watershed.
The ability of a property owner who does not have riparian or littoral water rights to receive water that is appropriated (allocated) by the local water company.
Example – the State of CA may provide permission to a non-littoral owner of a farm to use a nearby lake to water the owner’s crops. The owner who is not adjacent to water will obtain water through the DOCTRINE OF APPROPRIATION.
Well
In rural areas that are not serviced by a public water system, the property owner may drill down to the water table and install a well to bring water up to the surface.
Surface water, Percolating Water, Artesian Water
Surface water - Surface water in CA percolate back into the water table when they drain down into the soil n their way back to the Pacific Ocean
Percolating water - Water that drains down into the soil, but not through a defined channel
Artesian water - Water that seeps from the ground from an unknown source.
Draw Down Test
A good idea for rural single-family homes with an existing well during the due diligence period.
Determined by pumping the well dry then observing how long it takes for water to replenish. If the water does not replenish fast enough, the homeowner may want to consider installing a pressurized holding tank on the well.
If a loan is being used to purchase the property, a loan condition may be applied and must be completed before loan funding and close of escrow.
Potability Test
Performed to verify well water is suitable for drinking.
Sample water from the well is usually collected in a ziplock and sent to a lab for testing of harmful bacteria and other microorganisms.
Potable water - drinkable water
Septic System/ Septic Tank
Installed in rural areas to trap solid wastes and allow gray water to percolate back into the watershed.
