Real Estate Basics (Chapter 2)

Question 1

Another word for personal property?

Answer 1

Chattel

Question 2

commercial/business items fixed to a property ex. Jewelry cabinet

Answer 2

Trade fixtures

Question 3

Bundle of rights (DEEP C)

Answer 3

The tangible and intangible rights of ownership that come with owning real property; includes the right to sell individual “sticks” in the bundle separately from the land itself. The bundle of rights includes the rights of possession, disposition, enjoyment, exclusion, and control.

1. The right of possession (the right to use and occupy the property)
2. The right of control (the right to manage the property, within the law)
3. The right of exclusion (the right to decide who may or may not access the property)
4. The right of enjoyment (the right to use the property in any legal manner)
5. The right of disposition (the right to sell, will, encumber, or convey the property)

Question 4

Altering the characteristic of an item from real property to personal property by removing it from the land.

Answer 4

Severance

Question 5

An attachment of personal property to real property, thereby making it a fixture (also known as an attachment)

Answer 5

Annexation

Question 6

In real property, ________ is a legal term referring to the inherent or automatic ownership rights that are the natural consequences of property ownership.

Answer 6

Appurtenances

Question 7

List the types of Appurtenances (6 Items)

Answer 7

1. Profit
2. License
3. Air Rights
4. Water Rights
5. Subsurface Rights
6. Improvements

Question 8

What are appurtenance profits?

Answer 8

The right to take products out of the soil.

Question 9

What are appurtenance license?

Answer 9

Permission to do something on another’s land without actually possessing any interest or ownership in the land. Owner can revoke any time unless the termination date is disclosed. Temporary privilege.

Question 10

What are appurtenance air rights?

Answer 10

When you think of real property, you probably only think about the land and items attached to it. Air rights are the interest a landowner has in the air space above his property. In most cases, owning or renting land or a building includes the right to use the space above the land.

Question 11

What are appurtenance water rights types?

Answer 11

1. Riparian Right
2. Littoral Rights
3. The Doctrine of Prior Appropriation

Question 12

People who own property that runs into flowing water, like a river, stream, or creek, have what are known as riparian rights. These rights include the right to access and use the water for domestic purposes, like bathing, cleaning, and navigating, as long as it doesn’t disturb owners either up- or downstream.

Answer 12

Riparian Rights

Question 13

Oceans, bay, or lake, anything with a tidal cycle. Typically the foreshore—the area of the shorelines between the high- and low-water marks (or between the water and developed land or vegetation)—is publicly owned.

Answer 13

Littoral rights

Question 14

Primarily in western states, a legal doctrine that grants water rights to the first individual or entity to take water from a source for beneficial use. This doctrine is that water is owned by the general public, and not individual landowners, allowing water to be diverted to areas that need it.

Answer 14

The Doctrine of Prior Appropriation

Question 15

soil accumulates on the shoreline of a lake, stream, or ocean. It effectively increases the amount of land a landowner owns.

Answer 15

Accretion

Question 16

When a stream, river, or other body of water reduces the amount of land a landowner has.

Answer 16

Erosion

Question 17

It is a sudden removal of land due to water action, such as the loss of a huge chunk of sand dunes during a hurricane.

Answer 17

Avulsion

Question 18

land is gradually added because a body of water is slowly receding.

Answer 18

Reliction

Question 19

landowner’s right to what is under his property. This includes things like oil, minerals, and natural gas.

Answer 19

Subsurface rights

Question 20

A lot has been cleared, a parcel has had utilities attached to it, or landscaping has been added. Law: “A permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs”.

Answer 20

Improvements

Question 21

What is Lateral Support?

Answer 21

That a landowner has a right for her land to be held in place by neighboring land without her land slipping, caving in, or being subject to a landslide.
Whenever someone wants to improve or excavate their land they must:
Give reasonable notice to his neighbors that he is doing the excavation and how deep it will go.
Take proper care so that adjoining lands are left in their natural state.
If damage does occur, the excavating owner could be held liable.

Question 22

What is Subjacent Support?

Answer 22

Subjacent support means that the owner of the surface has the right for her land to be supported from beneath the surface—free from cave-ins, sinkholes, or other damages caused by the owner of the land below’s actions.

Question 23

plants that don’t require annual cultivation. These include trees, perennial shrubs, and some grasses. Considered real property.

Answer 23

Fruits of nature

Question 24

Plants that require annual cultivation. These include crops like fruits, vegetables, wheat, and corn.

Answer 24

Fruits of industry (emblements)

Question 25

Items like chandeliers, built-in appliances, and cabinetry.

Answer 25

Fixtures

Question 26

What is the IRMA Test and what is are the questions? (4 Questions)

Answer 26

Qualifies if an item is a fixture or personal property. 1. Intent of the parties (attacher or annexor) - If something is secured (nailed, glued, or screwed) that was temporary that item is now permanent. 2. Relationship of the parties or Annexor to the Property - In general the courts favor the side of the buyer or the side of the tennet when discussing fixtures of personal property. 3. Method or degree of attachment - If the item cannot be taken without damaging the property then it is real property. Adaption can come into effect here as well, even if an item like a fireplace isn't attached but other things like bloated down chairs are then you could make a case for it that it is now a fixture. 4. Adaptation of the item - This factor refers to whether an item was customized for use in the specific property. Ex. Laminate floors, window treatments

Question 27

Explain Trade Fixtures

Answer 27

Trade fixtures are fixtures that a tenant installs. Tenants are responsible for any damage caused by the removal of trade fixtures. Common examples of trade fixtures are shelving, outdoor signs, and machinery. All items must be true to be qualified as a trade fixture: Is the fixture necessary for the tenant’s business? Can the fixture be removed without damaging the property? Is the fixture removed before the lease expires?

Question 28

What are Agricultural fixtures and what are they classified as?

Answer 28

Items like feeding troughs, tool sheds, or other items installed for the purpose of farming. They are considered to be real property and must stay with the land when sold or at the end of a lease unless the landlord or seller agrees in writing that they may be taken.

Question 29

Any item that is a trade fixture or a normal fixture that is not paid off when the property is sold can be repossessed. The North Carolina Universal Commercial Code gives creditors the right to repossesses, and thereby remove, items pledged as collateral, which would normally be treated as real property.

Answer 29

The NC Uniform Commercial Code and Fixtures

Question 30

Define a manufactured home. Why is it called a manufactured home?

Answer 30

Chassis, tongue, axles, and wheels are still attached and also has a red HUD certification label affixed to it. Manufactured homes are considered personal property, unless converted to real estate.

Question 31

Why are mobile homes labeled as mobile homes?

Answer 31

Year that HUD started using federal construction standards. Before the Mobile Home Construction and Safety Standards Act was passed there was no building regulation for mobile homes

Question 32

Define a modular home, how is it different than a mobile home?

Answer 32

A modular home is built in pieces off-site to the state building code and is issued a state inspection label with a barcode. It is not built with transportation in mind and does not include a permanently attached chassis, wheels, or any of the other things that define a manufactured home

Question 33

Manufactured Homes Classified as Personal Property

Answer 33

They must be financed as personal property (like a car or television), rather than a mortgage. Personal property loans are made for shorter terms, and at higher interest rates, than traditional mortgages. Not all lenders make loans for manufactured housing. The classification translates to lower resale value and lower rates of appreciation, both of which make it more difficult to build equity. Certain RESPA protections don’t apply. (RESPA is a federal statute that provides consumer protections throughout the lending and settlement process.) In North Carolina, real estate licensees aren’t allowed to list manufactured homes classified as personal property, but can list those that have been converted to real property (see below). Buyers pay state sales tax, which is usually higher than state excise or transfer taxes paid by buyers of site-built homes. A home classified as personal property may not be eligible for homestead protections, which protect family homes from seizure for debt.

Question 34

Converting a Manufactured Home

Answer 34

The parts that make it transportable (the tongue, the axles, and the wheels) must be removed. It must be permanently affixed to land owned by the homeowner, or on land on which the homeowner has at least a 20-year lease. The owner must file an affidavit of conversion to cancel the vehicle’s title.

Question 35

Three types of Freehold Estates - Estates of inheritance

Answer 35

1. Fee Simple Estate: conveys all the rights of ownership possible, including use, disposition, and inheritability. This type of ownership endures for an indefinite period of time. 2. Defeasible Fee (Qualified) Estate: qualified by something the new owner can or can’t do. An example might be that a seller might prohibit the deforestation of the land. If a buyer disregards this prohibition and begins deforestation, the original owner can initiate legal proceedings to retake the property. 3. Estate for the Life of Another (pur autre vie): estate persists for the lifetime of a person (the measuring life) who doesn’t hold the estate. This person cannot pass the estate to heirs because they don't own the estate.

Question 36

What is a Freehold Estates – Life Estates?

Answer 36

property that individuals own for just their own lifetime.

Question 37

What rights does a Freehold Estates – Life Estates have? (3 Items)

Answer 37

1. The recipient of the life estate holds title to the property during his lifetime and is known as a life tenant. 2. The life tenant enjoys all but one of the rights conferred in the bundle of rights; they cannot sell or otherwise convey the property. 3. Life tenants have the right to take estovers, (law that permits a tenant to use timber from the leased property for minimum fuel, repairs, and tools.) from the property, i.e., necessary supplies. Typically, this has meant wood for fuel and repairs.

Question 38

What obligations does a Freehold Estates – Life Estates have?

Answer 38

1. The recipient of the life estate holds title to the property during his lifetime and is known as a life tenant. 2. Life tenants must pay taxes, property insurance, and any mortgage payment to prevent foreclosure. 3. Life tenants must also maintain the property so that when the estate ends, whoever gains possession of the property doesn't face diminished value or use. 4. When the life tenant dies, one of two things will happen: The original owner takes the property back (known as reversion). The property goes to a third party called a remainderman. When the life estate ends (on the death of the named individual), the remainderman holds title in fee simple estate. This might be in severalty (sole ownership) or concurrent ownership if there is more than one remainderman. This is often the case when a parent holds a life estate, with the children set up as remaindermen.

Question 39

Name the different types of water rights. (3 Types)

Answer 39

1. Riparian Rights 2. Littoral Rights 3. The Doctrine of Prior Appropriation

Question 40

when soil accumulates on the shoreline of a lake, stream, or ocean. It effectively increases the amount of land a landowner owns.

Answer 40

Accretion

Question 41

When a stream, river, or other body of water reduces the amount of land a landowner has, it is called _____.

Answer 41

Erosion

Question 42

It is a sudden removal of land due to water action, such as the loss of a huge chunk of sand dunes during a hurricane.

Answer 42

Avulsion

Question 43

land is gradually added because a body of water is slowly receding.

Answer 43

Reliction