Real Estate Law Flashcards
Chapter 1
Sources of Law
Federal (Constitution, legislative actions, boards and commissions) ; State (Constitution, legislative actions, ordinances by cities, towns and other local governments) ; court decisions
Common Law
The body of rules and principles founded on custom, usage, and court decisions derived from English Law
Land
“basis of all wealth”. Refers to the earth’s surface, the subsurface to the center of the earth, and the air above it to infinity. It is natural, and includes trees & water. There are 3 lots : surface lot, air lot, and subsurface lot.
Real Estate
Land plus improvements or artificial things permanently attached by man. Improvements are tangible items that have substance and attaches to or transfers with the real estate.
Improvements
Corporeal Appurtenances; any structure usually privately owned, erected on a site to enhance the value of the property. Can also be a publilcy owned structure added to or benefiting the land (sidewalk).
Real Property
Real Estate plus the bundle of legal rights.
Bundle of Legal Rights
included in real property, this includes, possession, control, enjoyment, exclusion, and disposition. They can be acquired or relinquished separately.
Appurtenance
a right, privilege, or an item that is associated with property and passes with the land. Examples: easements, parking spaces, water rights, docks, etc.
P.E.T.E
Governmental Limitations: Police Power, Eminent Domain, Taxation, Escheat
Police Power
The power of the local, state, and federal government to protect the health, safety and welfare of the public. Such as: environmental laws, building codes, zoning ordinances, license law, city planning.
Eminent Domain
The “right” of the government to take private property for public use. The processes used to exercise that right is called condemnation. The property must be utilized for public benefit and just compensation is to be paid to the owner. the owner is protected by due process and can challenge the governments action.
Taxation
A charge on real estate to fund the government. If taxes are not paid, the property may be sold at a tax sale to satisfy that delinquent tax bill. (property tax)
Escheat
When a person dies leaving no valid will (intestate) and no heirs, the real estate will revert to the state. Later, the property is usually sold at auction by the county to the highest bidder
Real Estate vs. Personal Property
Real Estate is characterized by “permanence”, where as personal property is characterized by “mobility”. Ownership of real estate is by a deed, and personal property is transferred by a bill of sale. Real property can be converted to personal property by “severance”
Emblements
Growing crops, such as corn or wheat that are produced annually through labor and industry. These are not usually transferred with real property, unless otherwise state in the contract.
Personal Property
Chattel or personalty that includes such thing like furniture, clothing, items that are mobile. It can become real property by attachment. (Think of buying a vanity, then installing it and attaching it in the bathroom).
Fixture
an article that was once personal property but has been affixed to the land or a building and is now considered to be real property.
Trade Fixtures/Chattel Fixtures
articles installed by a tenant under the term of a lease that are removable by the tenant before the lease expires. They are personal property and are no true fixtures (barbers chair).
Tests of a Fixture
- Intention and Relationship of the parties 2. Adaptation to Real Estate 3. Method of Annexation 4. Agreement
Riparian Rights
granted to the owners of properties located on rivers, streams or lakes. Navigable waters are public waterways. Property line is usually the waters edge or mean high watermark. In non-navigable waters, the property line extends to the center of the water way.
Water Rights “run with the land”
Littoral Rights
accrue to owners whose land borders large navigable lakes or oceans. The high water mark separates private and public property. Water rights “run with the land”
Means of Natural Alienation
Can increase or decrease the amount of property an owner owns; 1. Accretion, 2. Alluvion, 3. Reliction, 4. Erosion, 5. Avulsion
Accretion
The gradual buildup of land due to natural soil deposits
Alluvion
accumulation of land built up by soil depositions
Reliction
gaining of land because of receding water which uncovers the soil
Avulsion
The wasting or tearing away of land due to natural causes, e.g. earthquakes, floods, hurricanes.
Erosion
The gradual wearing away of land by water, wind, and general water conditions ; the diminishing of property by the elements.
Economic Characteristics of Real Estate
- Scarcity (total supply is fixed) , 2. Improvements (affect value of property and surrounding properties) 3. Permanence of investment (fixed investment, long term return) 4. Area preference (MOST IMPORTANT! Not facts but peoples preference is huge, LOCATION LOCATION LOCATION)
Physical Characteristics of Real Estate
- Immobility (geographic location can never be changed) 2. Indestructibility (Durable, but can depreciate) 3. Uniqueness or non-homogeneity (No two parcels of land are the same.
Land Descriptions / Legal Descriptions
How Land is described in real estate contracts. 1. Mete & Bounds, 2. Lot and Block, 3. Government Survey Systems, 4. Benchmark, 5. Datum
SC Legal Descriptions
Metes & Bounds, Lot & Block/Recorded Plat
Metes & Bounds
associated with surveying, it always starts with and ends up at a point of beginning (POB) so that the property is completely enclosed. Refers to both direction and distance to indicated monuments
Lot & Block
based on the plats of subdivisions. A surveyors plat map is recorded with the county and placed in a play book or map book. It divides the land into lots, blocks, and tracts. It shows public streets, lot sizes, and utility easements. Once recorded, it is part of the legal description.
Government Survey Systems / Rectangular survey system
not used in SC. It is a description, which uses baselines, meridians, townships and sections (640 acres) on a grid patter. Baselines run east and west while meridians run north and south.
Benchmark
A marker placed by a government surveyor showing elevation above sea level. Benchmarks are used by surveyors as a reference point to help locate a parcel of land and to measure elevations.
Datum
A surveyors plane from which elevations and depths are measured
Brokerage
Largest segment of the real estate business. It involves the process of bringing together people interested in conducting transactions.
Broker
Negotiates the sale, purchase and rental or real property for a fee. Can be a special agent. Must be licensed in SC
Agent
seeks to bring about a “meeting of the minds” by finding properties who are ready, willing and able to complete a real estate transaction. Must be licensed in SC
Appraisal
estimates the market value of a piece of property. As mandated by the Fed Gov, they license must be obtained in order to advertise and operate. They must be certified and approved by the SC Real Estate Commission/Appraisers Board
Property Management
A property manager maintains, markets, collects rent, and generally oversees a property for the owner. Their main duty is to protect the owners investment and maximize his profit.
Home Builder
pertains to a person who constructs or superintends the construction, repair, improvement, or re-improvement of a residential building or structure. A candidate must show proof of at least one year of actual experience under the supervision of a license builder. It is issued by the SC Homebuilders association
Home Inspection
SC law requires this license for those who charge a fee to inspect the physical condition of a dwelling. SC Homebuilders commission registers this license
Financing
involves the process of providing the funds necessary to complete a real estate transaction. Various lenders and financial institutions qualify and approve buyers for real estate loans. Mortgage brokers are not required to have a real estate licenses to conduct the financial business of real estate.
Sub dividers/Property Development
split property into smaller parcels. Development involves the improvement of the land such as constructing homes, water, and sewer lines, etc.
Uses of Real Property
Residential, Commercial, Industrial, Agricultural, Special Purpose
The Economic Market
goods and or services can be bought and sold and where an agreed price may be established. Ideally, it is open, competitive and free to respond to the forces of supply and demand. An increase in supply, demand may stabilize or decrease, prices go down ; A decrease in supply, demand increases, prices go up
Factors that affect Supply & Demand
Supply - labor and construction costs, government controls, financial policy.
Demand - population trends, demographics, employment and wage levels , mortgage lending policies, vacancy levels.
Accession
acquiring title to additions or improvements to real property as a result of the annexation of fixtures of the accretion of alluvial deposits along the banks of streams
Acre
a measure of land equal to 43,560sq ft
Air lot & Air Rights
designated air space over a piece of land. It may be transferred // the right to use the open space above a property, usually allowing the surface to be used for another purpose
Allodial system
a system of owned land ownership in which land is held are and clear of any rent or services due to the government; contrasted to the feudal system.
Clustering
The grouping of home sites within subdivisions on smaller lots than normal with the remaining land used as common areas
Escheat
the reversion of property to the state or county, as provided by state law in cases where the dependent dies intestate without heirs.
Front Footage
The measurement of parcel of land by the number of feet of street or road frontage
Inverse Condemnation
An action brought by a property owner seeking just compensation for land taken for public use when the taker of the property does not intend to bring eminent domain proceedings. Property is condemned because its use and value have been diminished due to an adjacent property public use.
Monument
A fixed natural or artificial object used to establish real estate boundaries for a metes and bounds description
Percolation test
a test of the soil to determine if it will absorb and drain water adequately to use a septic system for sewage disposal
Planned Unit Development (PUD)
a planned combination of diverse land uses, such as housing, recreation and shipping in one contained development or subdivision
Prior Appropriation
A concept of water ownership in which the landowners right to use available water is based on a government administered permit system.
Situs
The personal preference of people for one area over another, not necessarily used on objective facts and knowledge
Subsurface rights
ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property .
Tax Credit
An amount by which tax owed is reduced directly
Zoning ordinance
An exercise of police power by a municipality to regulate and control the character and use of property
