L8: Property Rights, Estates, Condos, HOA, Etc. Flashcards
What are the bundle of rights associated with real estate ownership?
(6)
1) Right of exclusion (no trespassing)
2) right of possession (a.k.a. right to use, occupy/live)
3) right of disposition (a.k.a. ride to transfer, sell/lease/will)
4) right of quiet enjoyment
5) right of control (alter, change or improve)
6) ride to encumber (put property as collateral)
Surface rights
Rights to access the surface area of the parcel (natural elements and structures)
Subsurface rights
Ownership rights to everything found beneath the surface
A.k.a., mineral rights
May be sold separate from surface rights and has priority over it
Cannot undermine lateral support (adjacent properties) or subjacent support (underline earth)
Air Rights
Right to use air space above the surface of land
Riparian Rights versus Littoral Rights
Riparian Rights:
- currents use of flow and water (EX. River, creeks, etc.)
– has right to use, but no ownership when navigable,
- rights to use to water’s edge when non-navigable,
- rights to use to midpoint
Littoral Rights:
- Always navigable, governs rights to use lakefront and ocean front properties
– right to use but cannot artificially change water’s location
Accession
Right
Right to all that the property produces (naturally or by human action)
Accretion
GRADUAL increase in land area through deposits of soil by natural forces
Alluvion
Soil that gets deposited through accretion
Erosion
Gradual loss of the land over time
Reliction
Gradual increase in land when water gradually withdraws
Avulsion
SUDDEN Loss of land by flood or stream/river change of direction/course
Land VS. Real estate VS. Real property
Land = includes surface of the earth, minerals under an air above
Real estate = land + improvements (non-natural structure built or affixated to land)
Real property = land + improvements + bundle of rights associated with real estate ownership (lifespan is usually forever and conveyed by deed) + fructus naturales (trees, uncultivated plants, decorative)
Personal property
Unattached, movable asset that usually goes with the seller (unless specified in a contract), A.k.a., chattel
Normally has a limited lifespan and it’s conveyed by a bill of sale or requested in a will
Fructus industriales & emblements (Annually cultivated crops)
Fixture and Trade Fixture
Fixture = Real property + object that is firmly attached to the land
Trade fixture = personal property owned and needed for a tenant’s business. Are property of the tenant.
Affixation/Annexation
Process of creating a fixture (from personal to real property)
Types:
– close association (conceptual linkage to property, ex. Garage door opener)
– adoption (customization of personal property for use with real property, ex. Drapes)
– agreement
Severance
Converting real property into personal property
Tests to see if it is a fixture
4
1) Method of attachment (probable damage to remove = fixture)
2) adaptability (adapted or integral to home = fixture)
3) relationship or agreement of the parties (business or personal)
4) intent (when item was installed)
Right of Survivorship
Co-ownership
Right that gives the right to the property when co-owner dies to the surviving party and not deceased’s heirs.
Tenancy in Common
TIC Agreement
Type of co-ownership agreement that has:
- right of inheritance
– ability to own unequal shares of the property
– unity of possession (enjoy the property)
Joint Tenancy
Type of co-ownership agreement in which:
– parties have equal and undivided interest in the property
– has the right of survivorship
If shares are sold while alive, the new owner becomes a tenant in common
What does it mean to “have an estate“?
To have a possessory interest in real property
It is a present interest
Can be: freehold or leasehold
PS: non-possessory interest = future interest
Freehold Estate
Individual with interest have some degree of ownership for an undetermined/unspecified time
Can be Free Simple or Life Estate
Free Simple Estate and the types (2)
A type of Freehold Estate
The most unlimited an absolute and most common for average homeowner
Can be:
ABSOLUTE = without restriction
DEFEASIBLE = perpetual ownership on the condition of that property is used for a certain purpose under specific conditions. If stipulation is violated, ownership reverts to original owner.
Has full bundle of rights connected to the property
Encumbrance
Restriction or limitation on a property that runs with the land and burdens the title
Types of Defeasible Estate
freehold estate
Based on the conditions attached, can be:
A) Determinable = title automatically reverts to original owner if deed requirements are violated, there is no need to take legal action.
B) Condition subsequent = grantor of the estate must prove in court the condition was violated, the change of ownership is not automatic.
Life Estate and types (2)
It is a type of Freehold Estate.
- It is limited to the duration of a measuring life.
- can create future interest for next in line to receive it (reversionary or remainder interest)
- can be: Conventional Life Estate or Legal Life Estate
Reversionary VS. Remainder interest
Life estate future interest
They are types of future interest created in Life Estate.
Reversionary Interest = upon death of owner, full ownership reverts back to grantor. A.k.a., Right of Reverter
Remainder interest = upon death of person whom the Life Estate is based on, the interest will pass to another party other than the grantor.
Future remainder interest recipient is the Remainderman.
Act of waste
When life estate tenants do something to diminish the value of the property
Conventional life estate and types (2)
Any estate created by owner through grant
Can be:
A) Ordinary = measure in life is that of the tenant
B) Pur Autre Vie = Measuring life is someone other than the tenant
Legal life estate and types (3)
Type of life estate created by state law with the focus to look out for a deceased’s survivors
Can be:
A) Power & Courtesy = right to inherit upon spouse’s death, not recognized in FL.
B) Elective Share Law = allows for living spouse to make a claim to their deceased spouse‘s property despite will. In FL can be claimed up to 30%.
C) Homestead Law = prevents someone’s primary residence from being forcibly sold to pay certain types of debt. Requires the signature of both spouses to sell.
Properties that are homesteaded are exempt property.
Leasehold Estate (what, parties involved & types)
Interest in the occupation of a property established through a lease.
Doesn’t include ownership, just occupancy.
Have a definite duration set through the lease.
Parties:
- landlord (lessor), permanent interest, reversion Estate
– tenant (lessee), temporary interest, leasehold Estate
Types:
- Estate for Years
- Periodic Estate
- Estate at Will
- Tenancy at Sufferance
Estate for Years
Type of Leasehold Estate 1/4
Type of Leasehold Estate
Has a specific starting and ending date
Once lease is expired, no need to act to terminate it
Does NOT automatically renew
Periodic Estate
Type of Leasehold Estate 2/4
Type of Leasehold Estate
Exists for a fixed period of time without specific end date
Renews automatically (“Periodic Tenancy “)
One of the parties must act to terminate it
Estate At Will
Type of Leasehold Estate 3/4
Type of leasehold Estate
Has a starting point but not an actual ending point
Can be an oral agreement, once rent is paid it becomes a Tenancy at Will
Requires action from one party to terminate it
Tenancy at Sufferance
Type of Leasehold Estate 4/4
Type of Leasehold Estate
Created when a tenant overstays the term of the lease without consent from landlord
Tenant = holdover tenant
Accepting rent doesn’t create a rental agreement and rent can be charged double
Community development district
Special district created by developers and gives designated support infrastructure to a specific community
CDD does special assessments
Properties in CDDs must provide disclosure above contract signature line
Condominium
Type of common interest ownership property
Owner has separate interest in their own unit and undivided interest in common areas
Ownership levels:
- Interior of unit = fee simple absolute
- Common elements = tenants in common
Limited common elements = areas of undivided interest but only used by a few or one (ex.marked parking)
Owners must pay maintenance fees to HOA
Can be self-managed (owners + board) or property manager-managed
Condominium Association = nonprofit ran by Board of Directors for operating purposes
Condominium Disclosure Documents
4+2 or 4+3
1) condominium declaration (once filled, it creates the condominium)
2) articles of incorporation
3) bylaws
4) FAQs
If buying from developer (15 to cancel if purchased):
5) Propsectus
6) Estimated Operating Budget
If resale (3 days to cancel):
5) Most recent annual financial report
6) Rules of Condo Association
7) Governance form
Co-ops
Build owned by a corporation (residence or shareholders)
Owners have proprietary lease is for their unit
Ownership is in the corporation/co-op, not the unit itself
There is maintenance fee and board
The corporation has Fee Simple or Leasehold Estate state on land
New buyers must be approved by the board
It’s a type of Common Interest Ownership Property
Co-op Disclosure Documents
1 or 4
Co-ops with 20+ units must provide: prospectus (15 cancellation period)
Re-sale must provide (3 day cancellation):
1) articles of incorporation
2) rules of the association
3) bylaws
4) FAQs
Timeshares
Types of ownership/use + disclosure docs
Type of common interest ownership of property
Has:
A) interval ownership = portion of unit owned as fee simple & interest is proportional to time purchased
or
B) right to use = it’s in the state for ears and at the end of the agreement, ownership reverts to developer
Disclosure documents (10 day cancellation):
1) listing agreement
2) contract
Tenancy by Entirety
For married couples only
Has:
- right of survivorship
- each spouse has equal & undivided interest in the property
Requires unity of person
Separate property
Property owned by a married person that is separate and not co-owned by their spouse
HOA
Homeowners association
Corporation responsible for the operation of a development and with the power to charge fees and levy assessments
Membership is mandatory
