Legal Aspects of RE - Chpt 2 - Real Property

Question 1

Land

Answer 1

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 natural things permanently attached to the earth, the air above the surface of the earth extending outward to infinity.

Question 2

Parcel or tract

Answer 2

A portion of land delineated by boundaries is considered a parcel or tract.

Question 3

Physical characteristics

Answer 3

Land has three unique physical characteristics: immobility, indestructibility, and heterogeneity.

Question 4

Real estate

Answer 4

The legal concept of real estate encompasses:

land
all man-made structures that are “permanently” attached to the land

Question 5

Improvements

Answer 5

Such man-made structures attached to the land are called improvements.

Question 6

Property

Answer 6

In common understanding, property is something that is owned by someone. From a more technical standpoint, property is not only the item that is owned but also a set of rights to the item enjoyed by the owner.

Question 7

Real property

Answer 7

Real property is real estate and the bundle of rights associated with owning the real estate.

Question 8

Personal property

Answer 8

Personal propertyis anything which is not real estate, and the rights associated with owning the personal property item. Items of personal property are also called chattels or personalty.

Question 9

Tangible or intangible property

Answer 9

Tangible property is physical, visible, and material. Intangible property is abstract, having no physical existence in itself, other than as evidence of one’s ownership interest.

Question 10

Real property rights

Answer 10

These consist of the bundle of rights associated with owning a parcel of real estate. Foremost of these rights is the right of possession.

Question 11

Littoral rights

Answer 11

These rights concern properties abutting bodies of water that are not moving, such as lakes and seas.

Question 12

Riparian rights

Answer 12

These rights concern properties abutting moving water such as streams and rivers. If a property abuts a stream or river, the owner’s riparian rights are determined by whether the water is navigable or not navigable.

Question 13

Fixtures

Answer 13

Fixtures are real property converted from personal property by attachment to real estate.

Question 14

Trade Fixtures

Answer 14

Trade fixtures are personal property items temporarily attached to real estate in order to conduct business. These items are designed to be removed at some point.

Question 15

Emblements

Answer 15

Emblements are plants or crops considered personal property since human intervention is necessary for planting and harvesting.

Question 16

Conversion

Answer 16

Conversion is the act of transforming real to personal property through severance, or personal to real property through affixing.

Question 17

What is the definition of a legal description?

Answer 17

A description which accurately locates and identifies the boundaries of the subject parcel to a degree acceptable by courts of law in the state where the property is located.

Question 18

What situations require a legal description?

Answer 18

A legal description is required for:
Public recording
Creating a valid deed of conveyance or lease
Completing mortgage documents
Executing and recording other legal documents

Question 19

When did the Public Land Survey System begin?

Answer 19

Shortly after the American Revolution, when the federal government became responsible for large areas of land west of the original thirteen states.

Question 20

What is metes and bounds description metes and bounds land description?

Answer 20

It identifies the boundaries of a parcel of real estate using:

Monuments
Directions or courses in the form of compass readings
Distances measured in any convenient unit of length
The description always identifies an enclosed area by starting at an origination point, called point of beginning, or POB, and returning to the POB at the end of the description. A metes and bounds description must return to the POB in order to be valid.

The term “metes” refers to distance and direction, and the term “bounds” refers to fixed reference points, or monuments and landmarks, which may be natural and artificial. Natural landmarks include trees, rocks, rivers, and lakes. Artificial landmarks are typically surveyor stakes.

Many states use the metes and bounds description to describe properties within the rectangular survey system.

A metes and bounds description begins with an identification of the city, county, and state where the property is located. Next, it identifies the POB and describes the distance and direction from the POB to the first monument, and then to subsequent monuments that define the property’s enclosed perimeter.

Question 21

Define Land description rectangular survey system, or government survey method

Answer 21

This system is based on sets of intersecting lines or Townships so it is also referred to as the Township and Range System.

Meridians run north and south. The principal meridian is the single designated meridian for identifying townships in the principal meridian’s geographical “jurisdiction.” There are 36 principal meridians in the national survey.
Parallels run east and west. The base parallel or base line is the designated line for identifying townships. There is a base parallel for each principal meridian.

A township is 36 square miles and a section is one square mile or 640 acres.

Question 22

Define Land Description method lot and block system

Answer 22

also called the recorded plat method, is used to describe properties in residential, commercial, and industrial subdivisions. This is the method most frequently used in metropolitan areas.

Question 23

Boundary Survey

Answer 23

Also referred to as a Land Survey Plat, a boundary survey locates and verifies all property corners and boundaries, shows the location of all improvements in relation to the property lines, includes an area of the overall property and shows any existing encroachments. The survey will also note any error between the found monumentation and the platted location of monuments. (Monumentation is the establishment of permanent on-the-ground objects that mark exact locations of surveyed points and lines.)All easements as platted or of record are shown in detail as well. Interior improvements such as buildings, drives, etc., are not located on this survey. Along with the location and description of all existing monuments, any missing property corners are also re-set as part of this process.

Question 24

Location Survey

Answer 24

A location survey is boundary survey with the additional location of all the interior improvements. Missing corner markers are replaced. The surveyor will prepare a map showing the boundaries and improvements. This type of survey may be required for obtaining a loan.

Question 25

Topographic Survey

Answer 25

Topographic Survey - This survey locates improvements and topographic features such as elevations of the land, embankments, contours, water courses, roads, ditches, utilities, etc. This survey is often used in conjunction with a Location Survey in order to prepare a Site Design Map, a Subdivision Map, or an Erosion Control Plan.

Question 26

Site Planning Survey

Answer 26

Site Planning Survey - This survey uses a boundary and topographic survey as a base to design future improvements. It can be a design for a house, a residential subdivision, a store, a shopping center, a new street or highway, a playground, or anything else.

Question 27

Subdivision Survey

Answer 27

Subdivision Survey - This often includes a topographic survey of a parcel of land which will be divided into two or more smaller tracts, lots or estate division. This can also be used for site design of lots, streets and drainage. It is for construction and recording.

Question 28

Construction Survey

Answer 28

Construction Survey – This survey uses surveying techniques to stake out buildings, roads, walls, utilities, etc. This includes horizontal and vertical grading, slope staking, and final as-built surveys.

Question 29

Geographic Positioning System - GPS

Answer 29

Geographic Positioning System - GPS surveys use portable receiving antennas to gather data transmitted from satellites which are used to calculate the position of the object being located on the surface of the earth. The receiving antennas can be miles apart and still obtain very accurate data. GPS surveys are used to establish coordinate control points for the State Plane Coordinate Systems, large boundary surveys, and subdivision surveys. It can also be used to collect data for Geographic Information Systems / Land Information Systems (GIS/LIS), such as the location of streets, homes, businesses, electric, phone & gas utilities, water & sewer systems, property lines’ soil & vegetation types, water; courses, etc. This data can be used in future planning, preservation and development.

Question 30

ALTA/ACSM Survey

Answer 30

ALTA/ACSM Survey - This is a very detailed survey often required by lending institutions and is strictly geared towards companies purchasing commercial property. Standards created by the American Land Title Association (ALTA) and the American Congress of Surveying and Mapping (ACSM) are used to create this type of survey. The location of all improvements in relation to property lines as well as any easements and setback requirements are shown on this survey as well as any encroachments that exist.

Question 31

Common Measurements

Answer 31

Rod - 16.5 feet; 5.5 yards

Chain - 66 feet; 4 rods; 100 links

Mile - 5,280 feet; 1760 yards; 320 rods

Sq. Mile - 640 acres

Acre - 43,560 sq. feet; 160 sq. rods

Section - 640 acres

Sq. Foot - 144 sq. inches

Sq. Yard - 9 sq. feet

Cu. Yard - 27 cu. feet

Question 32

The right to use a property

Answer 32

The right to use a property refers to the right to use it in certain ways, such as mining, cultivating, landscaping, razing, and building on the property. The right is subject to the limitations of local zoning and the legality of the use. One’s right to use may not infringe on the rights of others to use and enjoy their property. For example, an owner may be restricted from constructing a large pond on her property if in fact the pond would pose flooding and drainage hazards to the next door neighbor.

Question 33

The right to transfer interests in the property

Answer 33

The right to transfer interests in the property includes the right to sell, bequeath, lease, donate, or assign ownership interests. An owner may transfer certain individual rights to the property without transferring total ownership. Also, one may transfer ownership while retaining individual interests. For example, a person may sell mineral rights without selling the right of possession. On the other hand, the owner may convey all rights to the property except the mineral rights.

Question 34

The right to encumber the property

Answer 34

The right to encumber the property essentially means the right to mortgage the property as collateral for debt. There may be restrictions to this right, such as a spouse’s right to limit the degree to which a homestead may be mortgaged.

Question 35

The right to exclude

Answer 35

The right to exclude gives the property owner the legal right to keep others off the property and to prosecute trespassers.

Question 36

Appurtenances

Answer 36

An owner also has rights that are said to “run with the land.” These rights are called appurtenances and apply to those things that can be transferred along with the land upon its sale, such as air rights, surface rights, and subsurface rights.

Question 37

Surface rights

Answer 37

Surface rights apply to the real estate contained within the surface boundaries of the parcel. This includes the ground, all natural things affixed to the ground, and all improvements. Surface rights also include water rights. It basically pertains to the surface of the earth. Surface rights do not necessarily give a landowner right to the subsurface or the air.

Question 38

Water Rights

Answer 38

Water Rights

Water rights basically concern the rights to own and use water found in lakes, streams, rivers, and the ocean. In addition, they determine where parcel boundaries can be fixed with respect to adjoining bodies of water. What water rights does an owner of a property that contains, or adjoins, a body of water enjoy? The answer depends on three variables:

whether the state controls the water
whether the water is moving
whether the water is navigable

Question 39

Doctrine of Prior Appropriation

Answer 39

Doctrine of Prior Appropriation

Since water is a resource necessary for survival, some states – particularly those where water is scarce – have taken the legal position that the state owns and controls all bodies of water. Called the Doctrine of Prior Appropriation, this position requires that property owners obtain permits for use of water. If a proposed usage is reasonable and beneficial, the state will grant a permit, which over time, can attach to the property of the permit holder.

Question 40

Littoral Rights

Answer 40

Littoral rights concern properties abutting bodies of water that are not moving, such as lakes and seas. Owners of properties abutting a navigable, non-moving body of water enjoy the littoral right of use, but do not own the water or the land beneath the water. Ownership extends to the high-water mark of the body of water.

The legal premise underlying the definition of littoral rights is that a lake or sea is a navigable body of water, therefore, public property owned by the state. By contrast, a body of water entirely contained within the boundaries of an owner’s property is not navigable. In such a case, the owner would own the water, as well as, unrestricted rights of usage.

Littoral rights attach to the property. When the property is sold, the littoral rights transfer with the property to the new owner.

Question 41

Riparian Rights

Answer 41

Riparian rights concern properties abutting moving water, such as streams and rivers. If a property abuts a stream or river, the owner’s riparian rights are determined by whether the water is navigable or not navigable. If the property abuts a non-navigable stream, the owner enjoys unrestricted use of the water and owns the land beneath the stream to the stream’s midpoint. If the waterway in question is navigable, the waterway is considered to be a public easement. In such a case, the owner’s property extends to the water’s edge, as opposed to the midpoint of the waterway. The state owns the land beneath the water. However, the landowner has right to all accretions, which is the land resulting from the soil build-up caused by the natural action of the river or stream.

Navigable and non-navigable waterways must be determined by an official source. It is important to know the distinction, since mineral rights and royalties and boundary lines come into play. The state owns these interests in navigable streams. In certain rare conditions, it is possible to obtain private ownership of navigable waters.

Question 42

Ground Water Rights

Answer 42

Ground Water Rights

Water beneath the surface that runs in recognizable underground streams or collects in porous ground layers called aquifers is known as ground water. Landowners have overlying rights to the ground water in aquifers below their property. In most areas of California, overlying land owners may remove percolating ground water and put it to beneficial, reasonable use without approval from the State Board or a court. However, the landowner may not transport that water for use on land outside the ground water basin from which it is taken.

Question 43

Solid Minerals

Answer 43

Solid Minerals

Solid minerals, such as gold and silver, can easily be extracted by the property owner. These minerals are deemed real property until they are removed from the earth and become personal property. As we said earlier, the owner could also choose to sell off the mineral rights separately. It’s important to remember that the purchaser of any mineral rights automatically gets an implied easement to come onto the property to remove the minerals.

Question 44

Non-Solid Minerals

Answer 44

Non-Solid Minerals

Oil and gas are non-solid minerals that are trapped beneath the surface in porous layers of earth. Because of this, their presence may involve neighboring properties. Because of their fluid nature, even if an owner drills a well on his or her property to remove gas or oil from directly under the property, the substance is likely to travel toward the bottom of the well. When this happens, gas and oil from a bordering property may travel to a location under the neighbor’s property. To deal with this, the law allows oil or gas to be removed from wells on the surface of the owner’s land even if the oil or gas came from under a neighbor’s property. This is known as the rule of capture. If the neighbor wants to protect his or her own interests in the oil or gas, that neighbor must drill an offset well to prevent all of the gas or oil from traveling to just one well.

Question 45

Lateral Support

Answer 45

Lateral Support

Lateral support refers to support provided by the adjacent property. A landowner has the right to demand that a neighboring property owner does nothing to cause the land to collapse, which could result from some types of excavations. A statute in place regarding this issue has among its provisions the requirement that any landowner planning excavations must notify all neighboring property owners. Such notification allows the neighbors to take steps to protect their property.

Unless the excavations are extraordinarily deep, an excavating property owner can be held liable to damage to neighboring properties only if he or she did not follow the procedures outlined in the statute.

Question 46

Subjacent Support

Answer 46

Subjacent Support

Subjacent support refers to the right to have one’s property supported from beneath the surface. Subjacent support issues can arise when a landowner has transferred rights to remove minerals to someone else. The owner of the mineral rights could be held liable for damage to the property due to underground excavation, even if such excavation was performed with care.

Question 47

What are the four important rights associated with owning a parcel of real estate?

Answer 47

Right to use
Right to transfer
Right to encumber
Right to exclude

Question 48

Land can be laterally divided into what classifications of rights?

Answer 48

Surface rights
Subsurface rights
Air rights

Question 49

How are air rights delineated?

Answer 49

By imaginary vertical lines extended to infinity

Question 50

What do water rights concern?

Answer 50

The rights to own and use water found in lakes, streams, rivers, and the ocean

Question 51

Fixtures

Answer 51

A personal property item that has been converted to real property by attachment to real estate is called a fixture. Typical examples are: chandeliers, toilets, water pumps, septic tanks, and window shutters.

The owner of real property inherently owns all fixtures belonging to the real property. When the owner sells the real property, the buyer acquires rights to all fixtures. Fixtures not included in the sale must be itemized and excluded in the sale contract.

Question 52

Severance

Answer 52

Severance is the conversion of real property to personal property by detaching it from the real estate, such as by cutting down a tree, detaching a door from a shed, or removing an antenna from a roof.

Question 53

Affixing

Answer 53

Affixing, or attachment, is the act of converting personal property to real property by attaching it to the real estate, such as by assembling a pile of bricks into a barbecue pit, or constructing a boat dock from wood planks.

Question 54

Federal Regulation

Answer 54

Federal Regulation

In regulating real property rights, the federal government is primarily concerned with broad standards of real property usage, natural disaster, land description, and discrimination.

Federal agencies, such as the Federal Housing Administration, promote and regulate home ownership. The Environmental Protection Agency establishes protective usage restrictions and guidelines for dealing with hazardous materials and other environmental concerns. Federal flood insurance legislation requires certain homeowners to obtain flood insurance policies. Federal laws, such as the Federal Fair Housing Act of 1968, prohibit discrimination in housing based on race, religion, color, or national origin. Such laws as the Americans with Disabilities Act, prescribe design and accessibility standards.

The federal government does not levy real estate taxes.

Question 55

State Regulation

Answer 55

State Regulation

State governments are the primary regulatory entities of the real estate business. State governments establish real estate license laws and qualifications. In addition, state governments have established real estate commissions to administer license laws and oversee activities of licensees.

State governments also exert regional influence in the usage and environmental control of real estate within the state. Relevant state laws might include laws relating to flood zones, waste disposal, drainage control, shore preservation, and pollution standards.

States also play a role in defining how real property may be owned, transferred, encumbered, and inherited. For example, in some states a mortgaged property becomes the legal property of the lender until the mortgage loan is paid.

States have the power to levy real estate taxes, but generally pass this power to local government.

Question 56

Local Regulation

Answer 56

Local Regulation

County and local government regulation focuses on land use control, control of improvements, and taxation. Land use regulations and ordinances control how all property within the jurisdiction may be developed, improved, demolished, and managed. County and local governments have the power to zone land, take over land for the public good, issue building permits, and establish the rules for all development projects.

County and local governments, along with school districts and other local jurisdictions, have the power to levy real estate taxes.

Question 57

Judicial Regulation

Answer 57

Judicial Regulation

The judicial system exerts an influence on real estate ownership and use through decisions based on case law and common law, as distinguished from statutory law. Case law consists of decisions based on judicial precedent. Common law is the collective body of law deriving from custom and generally accepted practice in society.