Principals Flashcards
Lot and Block
- A System for the legal description of land that refers to parcels’ lot and block numbers, which appear on-recorded maps and plats of subdivided land; may also be used for assessment maps.
- Most recent system of legal descriptions
Metes and Bounds
- A system for the legal description of land that refers to the parcel’s boundaries, which are formed by the point of beginning (POB) and all intermediate points (bounds) and the courses or angular direction of each point (metes).
- Earliest system of legal description utilized in US. Today used primarily in 13 original colonies.
- A Surveyor provides a legal description.
Metes
Refers to the bearing or direction relative to North or South.
1 full circle = 360⁰
1⁰ = 60 (60 “Minutes”)
1’ = 60” (60 “Seconds”)
1⁰ = 3,600” (60 seconds per Minute x 60 Minutes per Degree)
Example: A property boundary is North 33⁰ 10’12” East. This would be read as “North 33 Degrees, 10 Minutes, 12 Seconds East”
Bounds
- The distances that a boundary runs at that prescribed angle. Distances are usually indicated in feet (using decimals instead of inches).
- Other earlier methods of measurements used = Rods and chains
1 Mile = 8 Furlongs 1 Furlong = 660 Feet, or 10 Chains 1 Chain = 66 Feet, or 4 Rods 1 Rod = 16.5 Feet, or 25 Links 1 Link = 7.92 Inches
Which system of legal descriptions came into common usage in the 1950s with the development of large subdivisions?
Lot and Block
Bearing, Distance
“Metes” refers to ______ and “bounds” refers to _____?
Metes and Bounds
Which system of legal description is the earliest system used in the US?
Gunter’s Chain
+ Many modern units of measurement are based on Gunter’s Chain
+ Edmund Gunter born in Wales in 1851, educated as a priest at Oxford, loved math
+ In 1607 he designed a chain”4 perches in length, divided into 100 links”. It was flexible, could be carried over shoulders and didn’t stretch or shrink
+ Easy to halve and quarter or double and redouble
In Gunter’s combination system an acre was 10 square chains
Rectangular Survey System
A land survey system used in Florida, Alabama, Mississippi and all states north of the Ohio River or west of the Mississippi River except Texas; divides land into townships and ranges approximately six miles square, each normally containing 36 one-square-mile sections of 640 acres, except when adjusted for the curvature of the earth.
+ Sometimes called Government Survey system, came along later and is the basis of descriptions in most states after the 13 colonies in the NE and Middle Atlantic states. Based on standardized measurements and consistent squares, as opposed to the irregular shapes commonly found in metes and bounds descriptions.+
Rectangular Survey System II
Early Congress decided that the remaining territories west and south of Ohio would be surveyed and divided up into townships
Thomas Hutchins was appointed Geographer to US by George Washington. On 9/30/1785 he started from a point on the west back of the Ohio river, in East Liverpool, OH.
In 1786 the party was strengthened by the addition of more surveyors and a military guard. Every six miles a new survey party started running a line due south
Over the next 30 years, or so, more than three quarters of the US was plotted out in these survey descriptions that still exist today. Accomplished by men on foot and horseback with a compass in hand and Gunther’s chain over their shoulders
Basic Measurement System
1 Township = 36 Square Miles (6 x 6 miles)
1 Section = 1 Square Mile (5,280 x 5,280 feet)
1 Square Mile = 640 Acres
¼ Section = 160 Acres
Quarter-Quarter Section = 40 Acres
Which system is found primarily in the Northeast?
Metes and Bounds
Estate
A right or interest in property. Defines an owner’s degree, quantity, nature, and extent of interest in real property. There are many different types of estates, including freehold (fee simple, determinable fee, and life estate) and leasehold. To be an estate in land, an interest must allow possession (either now or in the future) and be differentiated primarily by its duration.
Fee Simple Estate
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the government powers of taxation, eminent domain, police power and escheat.
Absolute ownership subject only to limitations imposed by the State; also called freehold.
Fee Simple II
The fullest and most complete type of estate
Still subject to common public limitations
Consists of the full bundle of rights
None have been exercised or given away
Inheritable
Transferable
Perpetual
If I die my heirs will inherit; while alive I may sell or transfer; I don’t have to do anything to continue ownership.
Fee Simple III
Most common form of ownership in residential real estate appraisals
If have mortgage (a lien against the property) owner does not have true fee simple title.
In the majority of appraisal assignments, the fee simple is what we are valuing; we do not take the existing mortgage into consideration when valuing the property
Not valuing owners equity position == appraisal job is to find market value of the fee simple estate.
Partial Interest
Divided or undivided rights in real estate that represent less than the whole (a fractional interest)
If one or more of the bundle of rights is missing, it results in a partial interest or partial estate
Life estates
Leased fee estates
Leasehold estates
Life Estate
Rights of use, occupancy and control, limited to the lifetime of a designated party, sometimes referred to as the life tenant
Example – Elderly person transfers ownership to another party, but retains right to live in property for the rest of their live. Upon death rights transfer to named person (called Remainderman)
An adjustment to the value of a life estate property would involve some sort of discounting of value based upon mortality tables and the expected remaining life of the person holding the life estate.
Leased Fee Interest
A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a lease)
Leasehold Interest
The tenant’s possessory interest created by a lease
When a property is leased, it creates two separate estates or interest. One belongs to the property owner and the other belongs to the tenant
If the house or land is leased at the time of sale, the value of the leasehold may be calculated separately from the leased fee ownership of the property itself. The appraiser would account for the terms and also factor in the length of time remaining on the lease.
Even though the owner of a leasehold interest has no real interest, a leasehold interest may have value if the contract rent stipulated in a lease is less than the property’s market rent. A leasehold estate is considered a non-freehold estate.
Easement
The right to use another’s land for a stated purpose.
Or
Non-possessory (incorporeal) interest in landed property conveying use, but not ownership, of a portion of that property.
Some else is allowed to enter a property and therefore the owner has relinquished the exclusive right to occupy and use the property. This creates a partial interest or diminished estate.
The effect of an easement can vary from negligible to substantial. A simple right of way across the edge of a property may have little or no impact. But a right-of-way or power line easement through the center of a property may have substantial impact on usability and value.
Easement in Gross
An easement that benefits a legal person or entity (individual, corporation, partnership, LLC, government entity, etc.) and not a particular tract of land; an easement having a servient estate but no dominant estate.
Examples – railroads, pipelines and utility companies Benefits one property but does not benefit another parcel of land Common in an area and affect a number of different properties. -Example – Everyone in a neighborhood may have a utility easement along the front of their property for local water and sewer lines.
Therefore, there may be no need to adjust for this factor, because the subject and all the properties that are used as comparables sales are affected by similar easements.
Easement Appurtenant
Easements can work for the benefit or the detriment of one party over another
If I own a property in the rear of yours and access it through an access right-of-way over your property, I gain a benefit and your property is encumbered
I have the dominant tenement and you would have the servient tenement
An easement having both dominant and servient estates. The easement interest passes with title to the dominant estate and continues to burden the servient estate.
An easement appurtenant contrasts with an easement in gross, which has a servient estate but no dominant estate.
My property in the rear is worth more because of the right-of-way access than if it had no access at all. A positive adjustment would be needed when comparing my property to one with no recorded access.
The property in the front, over which my right-of-way passes, may be worth less than another property that is not encumbered by aright-of-way. In that case an adjustment would have to be made when comparing that property to one that does not have a right-of-way over it.
Affirmative Easement
The right to perform a specific act on a property owned by another.
Also called dominant estate
Good kind of easement – works in your favor
Negative Easement
An easement preventing a property owner from certain, otherwise permitted, use of their land, (e.g., agreeing not to do something such as building a wall or fence blocking an adjoining property’s view.
Can be punitive in nature and create losses in value. Examples: Conservation easements Drainage easements Historic preservation easements Subsurface rights Air Rights Takes away basic rights
Conservation Easements
An interest in real property restricting future land use to preservation, conservation, wildlife habitat, or some combination of those uses. A conservation easement may permit farming, timber harvesting, or other uses of a rural nature to continue, subject to the easement. In some locations a conservation easement may be referred to as a conservation restriction.
Drainage Easements
The right to drain surface water fromone owner’s land over the land of one or more adjacent owners.
Can have significant impact on value
Historic Preservation Easement
Generally includes various kinds of controls
Imposed by municipalities
Usually are composed of small districts
Restrictions vary considerably can include such items as controls for exterior details such as doors, windows, and roof lines. May dictate choices of materials and paint colors.
Façade Easement
Traditionally considered a type of preservation easement that protected only the façade of a building, not the entire structure. More Precisely, a façade easement is an interest in real property that has the effect of prohibiting alteration of the exterior of an existing improvement; generally imposed on historically significant structures to ensure their preservation. To qualify for tax benefits associated with the donation of a façade easement, the structure must be a “certified historic structure” as defined in IRS Section 170(h)(4)(C) or be located in a registered historic district and be certified by the Secretary of the Interior as being of historic significance to the district. The Pension Protection Act of1996 added requirements to charitable contributions of façade easements, most significantly requiring that the entire exterior of the building not just the front façade be preserved.
Very desirable
Hard to sell
License
For real property a personal, assignable and typically revocable privilege or permit to perform some activity on the land of another without obtaining an interest in the property.
Can be terminated at any time and is considered to be personal property, rather than real property.
Example: The purchase of hunting or fishing rights on private property
Encroachment
Trespassing on the domain of another
Is physical in nature
Occurs when someone builds something over the property line of another
Typically unintentional…happens when property lines are unclear
When discovered, warrants some sort of action
FHA will insure a loan on a property that is subject to an encroachment if a perpetual encroachment easement is filed. This agreement recognizes the problem and absolves the mortgagee of any liability. The parties agree to just leave it alone.
Mary Jones
Mary Jones has a property with no road frontage. She has an access right of way across the property of her neighbor Bob Smith for ingress, egress and regress. Who has the dominant tenement in this situation?
