Law and Real Property Flashcards
What are the main areas of real property regulation?
Bundle of Rights Legal Description Financing Insurance Inheritance Taxation
What type of regulations does the federal government control?
Federal government regulations control the broad standards of real property usage, natural disaster, land description, and discrimination.
What types of regulations do local governments mainly address?
Local government regulations focus on land use control, control of improvements, and taxation. Notably, county and local governments are responsible for levying real property taxes.
How does judicial regulation differ from federal, state, and local regulations?
Judicial regulations use case and common law rulings to influence regulations. On the other hand, federal, state, and local regulations are created through statutory law.
What does the legal concept of land encompass?
the surface area of the earth
everything beneath the surface of the earth extending downward to its center
all natural things permanently attached to the earth
the air above the surface of the earth extending outward to infinity
What are the five important rights associated with owning a parcel of real estate?
Right to possession Right to use Right to transfer Right to encumber Right to exclude
Land can be laterally divided into what classifications of rights?
Surface rights
Subsurface rights
Air rights
How are air rights delineated?
By imaginary vertical lines extended to infinity
Describe the two classifications of property.
Real property is ownership of real estate and the bundle of rights associated with owning the real estate.
Personal property is ownership of anything that is not real estate, and the rights associated with owning the personal property item.
What is the definition of a fixture?
A personal property item that has been converted to real property by attachment to real estate.
How is a trade fixture different from a fixture?
A trade fixture has been temporarily affixed to a landlord’s real property in order to conduct business and may be detached and removed before, or upon surrender, of the leased premises.
Growing plants may be either real or personal property. How are they differentiated?
Plants and crops that grow naturally, without requiring anyone’s labor or machinery, are considered real property.
Plants and crops requiring human intervention and labor are called emblements which, despite their attachment to land, are considered personal property
What are the two general characteristics of real property?
Physical and economic characteristics
What are the three physical characteristics of real property?
Immobility
Indestructibility
Heterogeneity
What are four economic characteristics of real property?
Scarcity
Improvements
Permanence of investment
Area preference
What does permanence of investment mean?
Resources and capital used to build an improvement represent a large, fixed capital investment that is typically gives stable returns.
Although the Constitution guarantees private ownership of real estate
laws and regulations at every level of government qualify and limit individual real property ownership, and the bundle of rights associated with it.
Regulatory areas for real property include
the bundle of rights, legal descriptions, financing, insurance, inheritance, and taxation.
The bundle of rights associated with land ownership are
the right to possession, right to use, right to transfer, right to encumber, and right to exclude.
Regulation of Real Property Interests
Federal Regulation
State Regulation
Local Regulation
Judicial Regulation
Federal Regulation
grants overall rights of ownership; controls broad usage standards, discrimination
State Regulation
governs the real estate business; sets regional usage standards
Local Regulation
levies real estate taxes; controls specific usage
Judicial Regulation
applies case law and common law to disputes
The legal concept of land encompasses:
The surface area of the earth
Everything beneath the surface of the earth extending downward to its center
All naturalthings permanently attached to the earth
The air above the surface of the earth extending outward to infinity
The legal concept of real estate encompasses:
Land
All man-made structures that are “permanently” attached to the land
Land can be laterally severed into surface rights, subsurface rights, and air rights. Real property can also have water rights.
Our legal system recognizes two classifications of property
Real and Personal Property
Real Property
is ownership of real estate and the bundle of rights associated with owning the real estate
Personal Property
is ownership of anything that is not real estate, and the rights associated with owning the personal property item. Items of personal property are also called chattels or personalty.
An item may be real or personal property depending on
the “attachment” criterion and other circumstances.
Fixtures
real property converted from personal property by attachment to real estate
Diffrentiation Criteria
intention; adaptation; functionality; relationship of parties; contract provisions
Trade Fixtures
personal property items temporarily attached to real estate in order to conduct business; to be removed at some point
Emblements
plants or crops considered personal property since human intervention is necessary for planting, harvesting
Conversion
transforming real to personal property through severance, or personal to real property through affixing.
Real property has two general types of characteristics
Physical and Economic
Physical Characteristic
include immobility, indestructibility, and heterogeneity. These characteristics essentially describe how land cannot be moved or destroyed, and that each real property is unique.
Economic Characteristics
are scarcity, improvements, permanence of investment, and area preference. These economic considerations address overall supply of real property, surrounding land, infrastructure investment considerations, and the old saying “location, location, location”.
Area preference
is the most important economic characteristic of real property.
