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What is Real Estate? > Property > Flashcards

Property Flashcards

1
Q

Land

A

Surface of the earth, including all permanently attached natural features, extending downwards to the center of the earth and upwards to infinity.

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2
Q

Real Estate

A

is land plus improvements

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3
Q

Improvements

A

is any non-natural structure built on or affixed to the land. Buildings, fences, decks, and roads are all examples of improvements. Improvements must be permanently attached to the land.

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4
Q

Real Property

A

is Land/improvements/bundle of rights

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5
Q

What is bundle of rights

A

The right of exclusion (landowner with the right of exclusion can decide who gets to be on the their property and who doesn’t

the right of possession is the right to occupy, live, breathe, and do whatever on your property because you own it (also know as right to use)

the right of disposition (or transfer) is the right to sell, lease, and or will a property to anyone you choose ( you have the right to transfer all of your property rights or just some of them) ( also called right of transfer).

the right of quiet enjoyment is the right to use your property without interference. Interference could come from past owners trying to exert possession claims, or from literal interference like unreasonable noise (if city planned to build an airport next door) the right of quiet enjoyment isn’t just a right that property owners have. When a person rents a property, they also get the right of quiet enjoyment. This right covers a lessee’s right to possess a property without their landlord trying to use the part of the property the tenant is paying to lease.

the right of control gives the title holder the right to use the property in any way that is not illegal. They can control what’s build on it, who enters it, the landscaping . Anything that’s not prohibited by a deed restriction or by the law can be controlled by the owner. also includes the rights to encumber the property: to use it as collateral for a debt

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6
Q

Difference between right of possession and the right of control

A

possession allows someone to be in and use the property, while control allows someone to make changes to the property.
A renter has the right of possession, but probably not the right of control.

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7
Q

Property

A

is any item that may be owned

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8
Q

Tangible property

A

possessions that physically exist, such as a house or a bagel

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9
Q

Intangible property

A

stocks, patents, and other incorporeal things

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10
Q

What is conveyance

A

when property changes hands
from buyer to seller or landlord to tenant

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11
Q

Asset

A

Real estate is an asset or item of value. The buyer typically hopes their asset will increase in value, earning them equity

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12
Q

Equity

A

is the amount of property’s value the title holder owns (the value of the property minus any debt)
Equity is all the value of a property above what an owner owes their lender or other debt-holder

Ahmed bought a home that cost $200,000. He made a $20,000 down payment on that house, meaning that initially, his equity = $20,000. As he made more mortgage payments, his equity (or the amount of the house he actually owned) gradually increased.

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13
Q

Deed

A

Real property is conveyed by a written instrument called deed, which gives the deed holder legal title.
Legal title is the complete legal ownership of real property and the bundle of rights associated.

a transfer of legal title by deed is how real property moves around

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14
Q

Taking title

A

When you officially assume ownership of a property, it’s often referred to as taking title.

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15
Q

Federal Gov regulate what in real estate matter

A

broad issues, such as general land usage, natural disaster relief, environmental legislation, and anti-discrimination legislation

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16
Q

State Government

A

primary regulators of real estate law. they address things like water rights, local environmental rules, and mineral rights. State laws empower real estate commissions to create rules around real estate licensure, ethics, and practices.

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17
Q

Local government

A

cover real estate on an even smaller scale, addressing issues sucha as land use control, taxation, and zoning

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18
Q

Common law

A

is the side of law that comes from decisions made in courts, rather than from laws passed by lawmakers (conveyance rules, and the rules of real estate in general)

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19
Q

feudalism

A

was a systme of land ownership in which all the land in the kingdom was owned by the head of the state (the king or queen)

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20
Q

Allodial System

A

is complete ownership system is one in which the land is owned completely without an obligation of services or duties to another. This new system is what most real estate ownership looks like today. A person can have full ownership of their land, including all of the rights in the bundle of rights. They can also pass their land down to their heirs. this is called fee simple ownership.

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21
Q

Title

A

the actual ownership of a real property that includes the bundle of rights in which a party may own a legal or equitable interest; not an actual document

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22
Q

Personal property

A

is an unattached, moveable asset not considered real estate. usually goes with the seller in a sale unless otherwise specified in the sales contract. Personal property is conveyed by a bill of sale of bequest

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23
Q

Through what is real and personal property conveyed

A

Personal property is conveyed by bill of sale or by bequest in a will

real property is conveyed by deed

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24
Q

what is chattel

A

is personal property in the world of real estate

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25
Q

Fructus naturales

A

trees, long-term decorative plantings like perennial landscape plants and uncultivated plants and are considered to be real property because of their permanence

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26
Q

fructus industrials or emblements

A

annually cultivated crops and are considered to be personal property

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27
Q

improvements

A

attachments that are man mde are usually referred to as improvements. once affixed to the land, the improvement is considered part of the real property

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28
Q

fixtures

A

is an object that was once personal property but is now firmly attached to the land in such a way that it is considered to be real property

ex Ceiling fan
while in the box the ceiling fan is personal property
once permanently attached to the ceiling, the fan is real property and part of the home.

29
Q

annexation

A

the process of creating a fixture is annexation. During annexation, personal property is turned into real property. Attaching a ceiling fan to the ceiling is a prime example of this

Annexation, or physical attachment, is the most common way fixtures change from personal property to real property

30
Q

What other ways can a phyisal attachment can cnage from personal property to real property

A

Close association

Adoption

Agreement

31
Q

Close association

A

is a conceptual linkage to real property. A good example of close association is a garage door opener. The opener itself is not attached to the property, but it’s conceptually linked to the garage door, which is attached to the property. Away from the garage, the opener won’t work. It’s considered part of the real property that is the garage.

32
Q

Agreement another term for annexation (fixtures change from personal property to real property)

A

is when the parties to a contract agree that personal property will remain with the real property (make sure to get this in writing!).

Adoption

33
Q

adoption

A

is the customization of personal property for use with real property, such as drapes cut for a window in a room with a high ceiling.

34
Q

Trade fixtures (chattle fixture)

A

) is a fixture, like a shelf or display case, that is owned by and needed for a tenant’s business. (Personal property)

35
Q

Severance

A

Is the act of converting real property into personnel property. (apposite of affixation).

Ex If an owner decides to remove the family heirloom chandelier from the dining room, they would be severing the fixture from the home and converting it into personal property. (They would need to clear this ahead of time with all parties to the sales transaction!)

36
Q

What are the 5 methods used to determine if something is a fixture or not?

A

MARIA

Method of attachment: How the potential fixture is installed
Ex (Anything that would damage the home to remove? That’s probably a fixture. Even overhead lights (which can be easily uninstalled) qualifies because they’re wired directly into the ceiling, indicating they are intended to be permanent.

Adaptability: Means that anything specifically adapted to the home (like window shades) or anything that is integral to the operation of the home (like a box air conditioning unit or a specially sized door) could be a fixture.

Relationship of the parties: Refers to landlord-tenant relationships. When commercial tenants install things in a home, they are allowed to take them when they leave, like a trade fixture.

Ex (Lenny rents a commercial property to house his bakery. He installs shelves in the unit to hold his 47 types of flour. When Lenny’s lease is up, he can take his shelves with him.)

Intent: Refers to the intent the homeowner had when they installed the item in question.
Ex (Something that was intended to be permanent, like a built-in bookcase, is probably a fixture. If someone installed something intending to take it with them when they left, even if it had to be attached permanently, it might still be personal property.)

Agreement between the parties the contract trumps all, so whatever has been agreed upon by the parties to the transaction (in writing) is what happens.

37
Q

what are the 3 physical characteristics of land

A

Indestructibility
Immobility
Non=homogeneity

38
Q

Accession

A

Is the right to all that one’s own property produces, including that which is added, either naturally or by human action, to the property already owned. This often comes into play when dealing with crops

Accession can also be defined as increasing, adding, or coming to possess a right.
The owner having the right to whatever is produced by what they already own.

Ex (Let’s say strawberry plants sprout in your backyard. You didn’t plant them, but you still have the right to pick them, eat them, or make them into strawberry shortcake.)

39
Q

Accretion

A

is the process that results in the gradual increase in land area through deposits of soil by natural forces

Ex (Soil is deposited over time on the shore banks and deltas of a river. (The soil that gets deposited is also referred to as alluvion.)

40
Q

Erosion

A

Is the gradual loss of land over time. This most often happens when bodies of water wash away bordering land

Ex (The Grand Canyon was formed by the Colorado River through erosion.)

41
Q

Reliction

A

Is a gradual increase in land area when water gradually withdraws

Ex (There is a property on a lakefront in an area suffering through a 10-year drought. Chances are the lake’s water level has gone down during the drought, making the property’s landmass larger.)

42
Q

Avulsion

A

Is the sudden loss of land by flood or when a stream or rive changes course. Because it’s sudden change, no title is lost. Avulsion is caused by water

43
Q

Alluvion

A

the soil that gets deposited in accretion

44
Q

Accretion vs avulsion

A

Gradual is accretion
sudden is avulsion

45
Q

Scarcity

A

Is the economic characteristic that informs the economic principle of supply and demand. The supply of land will never increase, but the demand for land will increase as the population grows. And this is because land is scares.

46
Q

Situs

A

refers to he economic significance of a property’s location. The popular real estate phrase “location location location” is referring to the preferences people have for certain areas. Situs takes into account not only the geographical location of a property, but also the economic qualities of that area that makes it more or less desirable

47
Q

Modification

A

Refers to the fact that the value of land can be affected by human made changes to the land. Modifications affect situs.

Ex If the city decides to build a park in particular zip code, then the houses that border that park will probably appreciate in value.

48
Q

Fixity

A

refers to the fact that real estate exists in a fixed location and cannot be moved

49
Q

Illiquidity

A

is the relative difficulty of converting an asset to cash without loss of value.

Real estate tends to be illiquid compared to other investments like stocks or bonds. If you want to sell a stock, you can probably find a buyer that same day willing to pay the market price. That’s no true of a piece of property. If you need to sell very quickly, you may not get the full market value of the property.

50
Q

Appurtenances

A

Is a right that comes with the property

They’re things like surface rights, air rights, water rights, subsurface rights. Appurtenances are most often transferred with the property, but it’s possible to sell them separately.

Ex (An oil company buys the rights to the oil beneath a piece of property. The oil company now owns the subsurface rights to that property (one of the property’s appurtenances), and can transfer or keep them as they wish. Should that property be sold again in the future, the property owner would convey all rights to the buyer EXCEPT the oil rights that were no longer the landowner’s to sell. The new buyer would have to honor the pre-existing oil rights of the oil company.)

Appurtenances secure a right for one party. An appurtenance might also limit the right of another party.

Ex (Let’s say Linda owns the surface rights of a property and Maura owns the subsurface rights. When Linda sells the property to Kent, Maura’s rights are protected and Kent’s rights are slightly limited.)

51
Q

Surface rights

A

are the rights to access the surface area of parcel of real property. They govern both natural elements and structures or improvements built on or attached to the uppermost layer of the land

Give a person the right to access, use, and build things on the surface of a piece of land.

52
Q

Subsurface rights

A

are ownership rights to everything underneath a piece of land, extending downward to the center of the earth. Subsurface rights are important because things like oil, gas, or other valuable minerals may be found below the surface of the land also referred to as mineral rights.

53
Q

Can subsurface rights be sold separately from surface rights

A

Yes

Of note, If one person holds the surface rights to a property and another holds the subsurface rights. The person with the subsurface rights has priority. They can legally enter the property to extract the minerals they have rights to, but they have to be careful not to materially disturb the surface.

54
Q

Rule of Capture (law of capture)

A

a discussion of mineral rights should always include the rule of capture, which states that a landowner who drills a well for gas or oil on their land is entitled to all that well produces-even if the gas or oil migrates from beneath a neighbor’s property

This rule acknowledges the fact that gas and oil will flow in the direction of the lowest point of pressure, which will be at the well’s entry point into the reservoir that potentially extends beneath property owned by multiple parties.

Example To help you capture the idea of the rule of capture, check out the property owners pictured below:

Owner A and Owner B both have oil underneath their land. How lucky!

But Owner B takes all of the oil because the oil flows towards the lowest point of pressure, i.e. the point from which Owner B is actively pumping oil.

Owner B has the right to take all that oil. (You win some, you lose some, huh, Owner A?)

55
Q

Supporting rights

A

Land is supported by the land that surrounds it. A person who owns property has the right to not have their land move around because a neighbor has decided to dig a hole. Even if someone is digging entirely on their own property, if it disturbs an adjacent property, that’s not okay. This concept is know as supporting rights

Lateral support is provided by adjacent properties

Subjacent support comes from the underlying earth.

56
Q

Air rights

A

are the rights to use the air space above the surface of land. It could include space above a piece of land or the space owned inside a condominium unit

These rights may be sold or leased independently of the tract itself. in some dense cities with zoning regulations that dictate how high building can be built, smaller buildings like churches or theaters can sell their air rights to other, larger development, giving them the ability to build higher than their zoning would otherwise allow.

Planes and air travel also affects air rights. If a telephone company built reception towers that reached all the way to the moon, that might get in the way of some commercial or military flights. Air rights mitigate these disputes.

57
Q

Water Rights

A

are the rights of a property owner on a waterfront to access and use that water. Water rights can be a bit more complicated than air rights.

58
Q

When thinking about water rights what three questions should licensees ask themselves?

A

Who controls the water in question?
The state or the property owner?
Is the water moving?
is the water navigable?

59
Q

What are Appropriative rights?

A

are water rights (granted by the government) that allow a party to take water from a body of water for a specified and approved use. This doctrine applies to water resources within a state’s borders.

60
Q

What is doctrine of prior appropriation?

A

doctrine granting a state the power to control and regulate all water resources within its borders

61
Q

What are correlative rights

A

which apply during periods of drought or when water is more scarce. Correlative rights give owners the rights to a portion of their water, but not all.

62
Q

Can state water rights impede upon and limit an owner’s water rights

A

Yes

63
Q

When a property borders a body of water or a river, the right to enjoy the water is usually included in the bundles of rights that are called water rights?

A

True

64
Q

Riparian Rights

A

A landowner whose property borders a river has a right to use water from that river on his land.

65
Q

Littoral rights

A

Govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property

Littoral use prohibits the property owner from artificially changing the water’s location.

66
Q

Reparian rights and navigable

A

the landowners to each side of the water own the land just to the water’s edge

67
Q

non-navigable water and riparian rights

A

ownership extends to the midpoint beneath the flowing water that divides their property

68
Q

When evaluating littoral water rights, the water is always considered navigable, so ownership is always only to the water’s edge

when there are tides involved, the water’s edge is considered to be the mean high-water mark (high tide)

A

What is Real Estate? (4 decks)

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