CO Real Estate - Law and Practice (Unit 1-11) Flashcards
Six categories of real property
Residential
Commercial
Mixed use
Industrial
Agricultural
Special Purpose
When supply increases and demand goes down, prices…
Go down
When demand increases and supply decreases, prices…
Go up
Two characteristics that govern the way the market reacts to pressures of supply and demand
Uniqueness
Immobility
Factors affecting real estate supply are:
- labor force, construction and material costs
- government controls and financial policies
- local government factors
Factors affecting real estate demand are:
- Population
- Demographics
- Employment and wage levels
Advantages of real estate as an investment
Rate of return
Control
Appreciation
Equity Build up
Leverage
Tax Benefits
Disadvantages of real estate as an investment
Liquidity
Active Management
Risk
What can the use of property exchanges do for an investor?
Avoid taxation
Three physical characteristics of land
Immobility
Indestructibility
Uniqueness
What is the bundle of legal rights?
- right of possession
- right to control property lawfully
- right of enjoyment
- right of exclusion
- right of disposition
A right or privilege associated with the property, although not physically part of it
Appurtenance (parking spaces, water rights, easements)
Difference between riparian and littoral rights
Riparian: Common law rights granted to owners of land along the course of a flowing body of water (unrestricted right to use the water) and own the land under the water
Littoral: Owners whose land borders a commercially navigable body of water, do not own the actual land under water
Process of increasing land resulting from deposit of soil by water’s action
Accretion
Gradual wearing away of land by natural forces
Erosion
Sudden removal of land due to an act of nature
Avulsion
Under this doctrine, right to use the water, with exception of limited domestic use, is controlled by the state rather than land owner adjacent to water
Prior Appropriation
Four economic characteristics of real estate
Scarcity
Improvements
Permanence of Investment
Area preference or situs (location)
Items of personal property
Chattels
Annually cultivated crops such as fruit, veggies and grain
Emblements
An item of real property can become personal property through the process of
Severance
The process of changing personal property into real property
annexation
Personal property that has been so attached to land that by law it becomes part of the real property
Fixture
Legal tests of a fixture
Method of annexation
Adaptability of the item for land’s ordinary use
Relationship of the parties
Intention of the person in placing the item on the land
Agreement of the parties