Chapter 8 - Real Property Laws (8%)

Question 1

Section 8.1: REAL AND PERSONAL PROPERTY

:::STATE EXAM CONTENT AREA: VIII.A.1: THE NATURE OF PROPERTY - PHYSICAL COMPONENTS:::

**Real Estate and Real Property

Answer 1

 Real Estate

 Surface of the earth + man made improvements (artificial things attached to the land)

 Subsurface

 Air above the surface

 Mineral deposits, wildlife, timber, fish, water and soil

** Real Property

** Real estate + the legal bundle of rights (protected and guaranteed by government)

Question 2

Section 8.1: REAL AND PERSONAL PROPERTY

:::STATE EXAM CONTENT AREA: VIII.A.1: THE NATURE OF PROPERTY - PHYSICAL COMPONENTS:::

**Surface Rights

Answer 2

** Water

** Riparian Rights – Land abutting a flowing waterway - river or stream (e.g. intracostal)

 Littoral Rights – Land abutting non-flowing water – ocean, sea or lake (i.e. large bodies of water)

** Natural process – land/water

** Erosion – loss of land due to natural forces

** Accretion – Increase of land due to natural causes (OPPOSITE OF EROSION)

 Alluvion – Deposits of land as result of accretion

 Reliction – dry land after water recedes

Question 3

Section 8.1: REAL AND PERSONAL PROPERTY

:::STATE EXAM CONTENT AREA: VIII.A.2: THE NATURE OF PROPERTY - PERSONAL PROPERTY:::

Personal Property (personalty or chattel)

Answer 3

PERSONAL PROPERTY is Movable – not attached to land or buildings; may be tangible or intangible (e.g. furniture, automobiles, stocks, bonds, money, and mortgages)

 Fixture –was personal property - now attached to land or building

 Tenant affixes personal property, becomes fixture – CANNOT REMOVE at lease termination

(i.e.) Fixture becomes real property and is included in the sale

 Personal property is not included with a sale

 Unless listed in the contract.

 Trade Fixture

 Personal property that has been attached to real estate being used in the conduct of business

 Not considered part of the real estate

 CAN BE REMOVED at lease termination

Question 4

Section 8.1: REAL AND PERSONAL PROPERTY

:::STATE EXAM CONTENT AREA: VIII.A: THE NATURE OF PROPERTY:::

**/*** Court test to determine real or personal property

Answer 4

**/*** Four Court Tests (IRMA):

**/*** Intent - item was meant to become part of the real property

**/*** Relationship - terms of the lease e.g. landlord / tenant or seller / buyer

**/*** Method of Annexation - how item was installed

**/*** Adaptation - item designed for or necessary to nature of the property

Question 5

Section 8.1: REAL AND PERSONAL PROPERTY

:::STATE EXAM CONTENT AREA: VIII.B: GENERAL PROPERTY RIGHTS:::

**Legal Rights in Property

Answer 5

** There are 5 LARGE STICKS in the Bundle of Rights:

** 1) Possession - An owner has a right to possess or occupy the property.

** 2) Disposition - An owner generally has the right to sell the property, to give it away, or leave it in a will. However, there are exceptions.

** 3) Enjoyment (use) - An owner has the right to quiet use and enjoyment of the property w/o disturbance by hostile claimants.

** 4) Exclusion - Owners have the right to prevent others from entering or using their property.

** 5) Control - An owner has the right to determine how the property will be used.

NOTE: The physical real estate and the legal rights of ownership can be subdivided into a countless variety of smaller “bundles”.

Question 6

Section 8.2: ESTATES

:::STATE EXAM CONTENT AREA: VIII.C.1-7: ESTATES AND TENANCIES:::

Estates and Tenancies

Answer 6

 Estate – ownership, extent of rights (quality & quantity)

 Tenancy - rights to use and possess (anyone who has rights in real property)

** 2 classifications of estates:

**1) FREEHOLD - Ownership for Indefinite duration

**a) Fee simple estate - ALL the rights possible to possess; most comprehensive estate; Buyer receives unless contract specifies something less

** i) Estate in severalty - Ownership by 1 OWNER

** ii) Tenancy in common - Most common type of ownership other than husband and wife

** Unities of title may be equal or unequal

** Includes Inheritability instead of survivorship

** iii) Joint tenancy - UNCOMMON; Cannot leave interest in a will

** Unities of Title - equal and the same

PITT: Possession, Interest, Time, Title

** Right of Survivorship - Must state

** iv) Tenancy by the entireties - Ownership by husband and wife

** The marriage owns the property

** Neither spouse owns any individually

** Right of Survivorship - included

** Divorce

** Ownership converts to a tenancy in common

** Separate property

** Married – can own property separately

** Owned by one spouse before marriage

** Acquired by gift or inheritance during marriage

** Spouse can convey without consent of other

** b) Life estate - missing right to choice who gets it when you die; ownership ends at death; USUALLY NOT ON A CONTRACT, BUT ON A DEED

** While the life estate exists

** Reversion estate - ownership will return to the original grantor

** Remainder estate - ownership will pass to a third party

** 2) NON-FREEHOLD - not ownership; right to possess and use

** a) Tenancy at will (ORAL OR WRITTEN)- tenant has possession with the owner’s permission

** Without specific term

** May be terminated with proper notice

** e.g. 15 days for a month to month

** b) Tenancy for years (WRITTEN)

** Definite termination date

** Owner has estate in reversion

** c) Tenancy at severance - tenant in possession without the owner’s permission

** Holdover tenant

** May be terminated without notice

NOTE: Preparing leases for someone else is practicing law  Licensees are exempt only if using the forms approved by the Florida Supreme court

Question 7

Section 8.2: ESTATES

**Elective Share

Answer 7

Purpose - protects surviving spouse (WIDOWS AND WIDOWERS) from an unfair will

** Surviving spouse entitled to 30% of real and personal property

** Not automatic - must be filed w/i 4 months of the date of first public notice of the administration of the estate

** Must be elected – can override will; If the will is litigated, elective share must be filed with the court w/i 40 days following the termination of litigation

** Personal right – cannot be sold

** Does not apply to property held by:

** Tenancy by the entireties

** Homestead property

Question 8

Section 8.2: ESTATES

:::STATE EXAM CONTENT AREA: VIII.D.1-2: HOMESTEAD:::

** Constitutional Homestead Rights

Answer 8

Homestead - any real property owned by the HEAD OF A HOUSEHOLD WHO RESIDES THEREIN (either spouse can claim to be head of household)

** Size

** Outside municipality - 160 acres

** Inside municipality – Half acre

** Tax Exemption

** Up to $50,000 maximum deducted from assessed value before calculating property tax

** Other exemptions – Chapter 18

** Homestead property IS PROTECTED from forced sale of property to satisfy personal judgment liens such as;

** personal loans

** credit card debt

** Homestead property IS NOT PROTECTED from forced sale for direct liens such as;

** Real property taxes

** Special assessments

** Mortgages

** Vendor’s liens

** Construction liens

** Special rules to distribution of homestead property upon the death of an owner

** If homestead was owned as separate property of the decedent, the surviving spoue is entitled to a life estate; if there are lineal descendants, they become vested remaindermen. Surviving spouse is also entitled to $1,000 worth of personal effects, $10,000 worth of home furnishing, and all automobiles

** Homestead overrides any disposition in the will w/ one EXCEPTION:

** The homestead may be left in fee simple to the surviving spouse if there are no minor children.

NOTE: HOMESTEAD RIGHTS ARE A PROVISION OF THE FLORIDA STATE CONSTITUTION AND TAKE PRECEDENCE OVER THE LAW OF DESCENT AND DISTRIBUTION AND ELECTIVE SHARE.

** If a homestead is abandoned, rights are lost. Rights are not lost as a result of divorce if there are minor children who continue to live there. Both spouses must sign any conveyance or mortgage of homestead property, even if the property is owned as separate property by only one spouse.

** HOMESTEAD RIGHTS are AUTOMATIC and do not require any sort of filing.

Question 9

Section 8.3: CONDOMINIUMS, COOPERATIVES, AND TIMESHARES

:::STATE EXAM CONTENT AREA: VIII.E: COOPERATIVES, CONDOMINIUMS, AND TIMESHARES:::

** Condos, Coops, and Timeshares

Answer 9

 DBPR Regulates via:

 The Division of Florida Condominiums, Timeshare, and Mobile Homes

** Are all considered to be real estate; therefore a real estate license is required to sell or lease these types of property, unless the individual is working directly for the owner-developer and is paid a salary.

Question 10

Section 8.3: CONDOMINIUMS, COOPERATIVES, AND TIMESHARES

:::STATE EXAM CONTENT AREA: VIII.E: COOPERATIVES, CONDOMINIUMS, AND TIMESHARES:::

Condos

Answer 10

 Owners purchase an individual unit (cube in the sky) in a multi-unit building

 Owners have title to airspace within the walls of unit

 Includes a Tenancy in Common ownership for common areas

 Rescission Period

 15 days receipt from developer

 3 business days for resale

*** Main documents

*** Declaration (master deed)

**** creates the condominium and provides for individual ownership of units)

*** Articles of Incorporation

*** Establishes the condo association as a legal entity

*** By-Laws

*** Describes administration and management of the property

*** Rules of the Association

*** Assessment shares, etc.

*** Question and Answer Sheet

*** Provides buyers with answers to common questions

*** Master Insurance Policy

*** insures the common areas and protects individual owners against lawsuits that may arise from accidents that occur in common areas. (Note: Individual unit owners must provide their own coverage for the interior of the unit and personal property.)

Question 11

Section 8.3: CONDOMINIUMS, COOPERATIVES, AND TIMESHARES

:::STATE EXAM CONTENT AREA: VIII.E: COOPERATIVES, CONDOMINIUMS, AND TIMESHARES:::

Coops

Answer 11

 Title is held by a Corporation

 Owners receive shares of stock instead of real estate

 Owners receive a proprietary lease

 Enjoy same benefits as if they owned unit

 Real estate tax deductions

 Equity buildup as master mortgage is paid down

 Appreciation in property – stock value goes up

NOTE: If a cooperative shareholder fails to meet his or her financial obligations, the remaining shareholders must make up the shortage or the corporation is in default.

 Rescission Period

 15 days for New

 3 business days for resale

Question 12

Section 8.3: CONDOMINIUMS, COOPERATIVES, AND TIMESHARES

:::STATE EXAM CONTENT AREA: VIII.E: COOPERATIVES, CONDOMINIUMS, AND TIMESHARES:::

Timeshares

Answer 12

 Condominium divided into time segments (usually weeks)

 The 2 forms of time-sharing are

 Interval Ownership (best) - fee simple ownership as a tenant in common with the other timeshare unit owners

 Right-To-Use - temporary in nature - purchased as a tenancy for years, converting to a tenancy in common after specified number of years

 Rescission Period

 10 days for new

 10 days for resale