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Ownership and Transference > Estates and Interests > Flashcards

Estates and Interests Flashcards

1
Q

Real Property

A

Defined by three areas:

  1. Land
  2. Man-made items called Real Estate
  3. Rights associated with the property called Real Property.
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2
Q

Land

A

Comprised of the physical dirt and earth within a given area and any naturally growing plants on it.

It is thought to mean from the center of the earth to the heavens above.

Categorized further into 3 subcategories:

  1. Surface
  2. Subsurface
  3. Air rights
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3
Q

Appurtenance (land right or benefit)

A

Is a right or benefit that is associated with a property but not necessarily attached to the property itself.
For example a dock siting in the lake included with the house on the water when purchased.
Another is a basement garage in a condo on the third floor.

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4
Q

Real estate

A

Is the LAND plus any man-made items on the land of the called improvements.

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5
Q

Improvements

A

is any permanent structure on real property or any work on the property (such as planting trees) that can increase its value.

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6
Q

Real Property

A

Is Land + Real Estate + Legal Bundle of Rights.
Bundle of rights consists of five rights sometimes called twigs.
1. Possession
2. Control
3. Exclusion
4. Disposition
5. Enjoyment

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7
Q

Bundle of Rights

A

Describes property rights belonging to the property owner. 5 twigs…

  1. Right of Possession is the right to occupy the property.
  2. Right of Control is the right to determine how the owner will use the property.
  3. Right of Exclusion is the right to refuse others legal entrance, use or interference of the property.
  4. Right of Disposition is the right to determine how the property is sold or given away to another property.
  5. Right of Enjoyment also called quiet enjoyment is the right use or enjoy the property without any third-party interference.

As a real property owner, you have the fullest rights to the property, providing you are not breaking state, local and federal laws.

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8
Q

Personal Property (or Chattel)

A

Is anything other than land that can be the subject of ownership.
Common items in a real estate transaction that would be considered personal property are couches, dining room tables, dressers etc.

If item is movable it is personal property. If not movable, it is real property.

Some items appear to to be personal property but in fact may be real property. i.e. Light fixtures.

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9
Q

Fixtures

A

Items that appear to be personal property but are AFFIXED in such a way they become real property. i.e. ceiling fns, mini blinds, and curtain rods are examples are such items.

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10
Q

Three ways to determine if an item is real or personal:

A
  1. Apply movability test and consider if the item is affixed to the property. Real property is not movable it is affixed.
    Microwave on countertop vs attached to stove above it.
  2. Is item part of a system. Fridge movable vs attached to cabinetry system. Attached to cab is Real property.
  3. Parties can decide whether an item is real or personal in the purchase agreement. If both properties agree the ceiling fan will be removed and taken with the seller, it’s deemed personal property.
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11
Q

Trade fixtures

A

Used in commercial real estate as well.
Trade fixtures is a tenant’s personal property that’s affixed to the landlord’s real property. Trade fixtures not removed by the tenant at or before the end of the lease can become a landlord’s real property through Construction Annexation or Accession.

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12
Q

Constructive annexation or accession

A

Is an action where a landlords’ property value is increased by labor, material, or items added to the property by a tenant. This can come in the form of a tenant improving the landlord’s property in any manner and not returning it to the original condition at the end of the lease.

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13
Q

Severance and Annexation

A

A characteristic of real and personal property can be altered at time by two ways.

  1. Severance: Real property to start, then removed from property. i.e. apple tree planted than removed.
  2. Annexation: Personal property turned to real property. i.e. pile of wood left on property is personal property; used to build a deck therefore now is real property.
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14
Q

Plants

A

Two distinct types:
1. Fructus industriales
Are industrial fruits, called Emblements, planted on an annual basis and harvested. i.e. corn, hay oats barley tobbacco etc. These are considered the personal property of the seller and has the right to remove them at or before the time of sale of the property.
He also could return later after the sale to roll
2. Fructus naturales
are naturally occurring fruits such s trees,bushes, and flowers. Are considered real property and remain with the real property at the time of sale.

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15
Q

Estate in Land

A

Can be defined as the degree or nature of interest enjoyed by the property owner. An Interest in the property must allow for possession and enjoyment tone considered an estate.

Often an Interest is defined by the time or length of possession.

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16
Q

Types of Estates

A
  1. Freehold
  2. Leasehold
  3. Life
  4. Legal Life

They vary in nature and are classified bed upon the duration of ownership, with freehold being the longest and life estate being the shortest duration of ownership.

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17
Q

Freehold Estates and types

A

Freehold estate is an estate held for an indeterminable amount of time as in forever or a lifetime.

One Type of Freehold:
Fee simple estate- where property can be passed to an owner’s heirs. A fee simple estate occurs when all five rights (enjoyment, exclusion, disposition, control and possession) are transferred from the seller to the buyer in some form.

18
Q

Types of Fee Simple

A
  1. Fee simple absolute
  2. Fee simple defeasible with 2 subsets
    a. Fee simple determinable
    b. Fee Simple condition
19
Q

Fee Simple Absolute

A

It is the highest form or degree.
When a fee simple absolute estate is passed to a new owner, he would have the enjoyment “to the fullest extent” of the property. When the owner dies, the property may pass it to any co-owners, to any heirs, or be a legal will.

A fee simple absolute is only subject to restrictive covenants and local, state or federal laws including zoning laws.

20
Q

Fee Simple Defeasible

A

Is similar in that all rights are transferred as with Absolute; however, there is some limiting or qualifying condition that must be met.
Two Types
a. Fee simple determinable
b. Fee Simple condition

21
Q

Fee Simple Defeasible Two Types

a. Fee simple determinable
b. Fee Simple condition

A

a. Fee simple determinable
Means “as long as” or “during”
b. Fee Simple condition subsequent
Means “as a condition of”

Both degrees of ownership although not absolute give the property owner all the rights of the property but limit the control through a defeasance or restriction.

22
Q

Fee simple determinable

A

Fee simple determinable is used to ensure there’s some activity or even or lack thereof , that continued during the ownership of the new owner.

The former owner retains the right call the “Possibility of Reverter” which allows for the property to revert automatically to the holder of the right without any court intervention, should the current owner fail to maintain the defeasance.

ie seller sells church. “ as long as it is used for religious functions” he may use fee simple determinable. if not used as such, the property reverts to the original owner without any court proceedings.

All these rights are transferrable to subsequent hits and successors known as inheritable rights.

23
Q

Fee simple condition subsequent

A

Is based on the condition that’s placed on the new owner by the seller. HOWEVER, if the condition is not met, the previous owner has to seek court remedies for the property to revert to him.

All these rights are transferrable to subsequent hits and successors known as inheritable rights.

24
Q

Life estate

A

While it is a freehold estate due to the indeterminable amount of time owned, a life estate is not forever but rather determined by the life a tenant or someone else identified during the creation of the life estate.

Life estate is not inheritable because Right of Disposition is not granted to the new owner but retained by the current owner to be decided later.

25
Q

Life Tenant

A

A receiver of a Life Estate.

An ordinary life estate is when the life of tenant’s death will trigger a transfer of the property to someone else.

26
Q

A pur autre vie
Revisionary Interest
Remainderman’s Interest

A

A life estate when the death of someone other than the life tenant triggers the transfer of ownership property.

Example: Father gives house to son with all rights except rights of disposition. The son therefore becomes the Life Tenant. Death of Life Tenant triggers house back to the father or his heirs or successors.
However, if Life of Tenant (son) can not take care of himself, the father under a “put auto vie” life estate can transfer the property to an Agency to care for him. In this case, the agency would be the life tenant. However, only the death of the son would trigger the transfer of property back to the father and heirs/successors or who ever was named in the creation of the life estate NOT the death of the AGENCY.

Revisionary Interest: if the property is transferred back to originator of the life estate, he is granted a Revisionary Interest.

Remainderman’s Interest: If the person named is someone other than the original creator of the life estate, this person or entity is granted a remainderman’s interest.

27
Q 
Legal Life Estate:
Types of Life Estates
Dower
Curtesy
Homestead
A

Is created by law rather than by property owners like a Life Estate.

28
Q

Dower

A

Is the Life estate of a wife in her deceased husband’s real estate.
Upon the death of husband/wife, the surviving spouse is granted an interest in the property to protect them from the property being transferred without their consent or knowledge.
The surviving spouse can release their dower or curtesy right upon the sale or voluntary transfer of the property.
Therefore it is important to gain both spouses signature when listing a property so there’s no question of ownership when it comes time to transfer the property.

29
Q

Curtesy

A

Is the Life estate of a husband in his deceased wife’s real estate.Upon the death of husband/wife, the surviving spouse is granted an interest in the property to protect them from the property being transferred without their consent or knowledge.
The surviving spouse can release their dower or curtesy right upon the sale or voluntary transfer of the property.
Therefore it is important to gain both spouses signature when listing a property so there’s no question of ownership when it comes time to transfer the property.

30
Q

Homestead

A

Is a legal life estate that protects the family and their primary residence against unsecured creditors (one that does not have collateral from the borrower).
It only protects against unsecured creditors and not secured debts such as mortgage or real estate tax liens.

Some states protect only a portion of the value of the real property against debts, judgments, or charges. Others protect entire amount of property

31
Q

Surface
Subsurface
Air

Water Rights

A

Land further sub divided into:
Surface
Subsurface
Air

Water rights are the statutory rights granted to property owners in or around bodies of water that can include rivers, streams and lakes.

32
Q

Surface rights

A

Ownership rights in apparel of land limited to the surface of the property and DO NOT INCLUDE the air rights above it or the subsurface or mineral below it.

Surface rights implies that the owner may do whatever he wishes to the land as far as law permits.

33
Q

Subsurface rights

A

Under common law, an owner of land also owns down to the center of the earth. As for how much of the land below your property you won, there’s no real limit enforced by courts. However, you can not break environmental laws and must have appropriate permits before digging.

34
Q

Subsurface rights and associated mineral, gas and oil

A

In most countries, all mineral resource belong to the country’s government. Includes all valuable rocks, minerals, oil and gas found on or within the earth. However in the US and a few other countries, ownership of mineral resources is granted to the individuals who own the surface rights.

35
Q

Mineral rights

A

Mineral rights can be described as the unseen value associate with tract of land and was commingled with surface rights and royalty rights. As oil and gas production began in US, these rights started to be viewed independently.

This separation of rights allowed for an owner to split out the mineral rights as a separate entity and sell or lease the rights to someone else.

Coal, natural gas, and other subsurface entities also are considered within the realm of mineral rights.

36
Q

Air rights

A

Historically, property owners owned to the center of the earth and to the top of the heavens which included the right to all the air above the property.
However, until the invention of aircraft, the matter typically arose only in disputes over the right to remove tree limbs extending over one’s property.
See FAA

37
Q

Federal Aviation Administration (FAA)

A

In 1926 Congress created what we now call the FAA and declared that the air above 500 feet is public domain due to invention of aircraft.

83 feet above private property is yours.
Gap then is whose?

38
Q

Water rights

A

Water rights generally emerge from a person’s ownership of land that borders the banks of a body of water or from a person’s actual use of the water.

Water rights are conferred and regulated by common law, state and federal legislative bodies and other government departments.

Water rights also can be created and transferred by contract.

39
Q

Riparian Rights

A

Are common law rights granted to property owners along rivers, streams, or creeks. States typically allows for unrestricted use of the body of water.

40
Q

Riparian Rights:

Navigable vs Non-novigable

A

Navigable:
If a stream is navigable as determined by the US Coast Guard, the owner would only enjoy the ownership to the edge of the water. Navigable waters are considered PUBLIC rights of ways and use and travel by the public is allowed. Furthermore, the ground beneath all navigable water is owned by the state.

Non-navigable:
If stream is non-navigable, the property owner owns to the center of the water not to the edge.

Restrictions to either of above:
TO not contaminate the water nor impede the flow of water to other people’s land because all running water eventually flows into the public ocean.

41
Q

Littoral rights

A

Are a landowner’s claim to use water in large navigable lakes and oceans adjacent to his or her property. The ownership rights to land bordering these bodes of water goes up to the high-water mark. Government owns land below this high water mark point. These rights concern the ability of the littoral property owner to use the shore and the adjoining water.

Littoral rights are the appurtenant (belong) to the land, which means they go with the land when you sell it.

Ownership and Transference (2 decks)

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